By: Hartnett (Senate Sponsor - Watson) H.B. No. 3085
(In the Senate - Received from the House May 13, 2009;
May 14, 2009, read first time and referred to Committee on
Jurisprudence; May 23, 2009, reported favorably by the following
vote: Yeas 5, Nays 0; May 23, 2009, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the independent administration of a decedent's estate.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. INDEPENDENT ADMINISTRATION: TEXAS PROBATE CODE
SECTION 1.01. The Texas Probate Code is amended by adding
Chapter VI-1 to read as follows:
CHAPTER VI-1. INDEPENDENT ADMINISTRATION
PART 1. CREATION
Sec. 177A. EXPRESSION OF TESTATOR'S INTENT IN WILL. (a)
Any person capable of making a will may provide in the person's will
that no other action shall be had in the probate court in relation
to the settlement of the person's estate than the probating and
recording of the will and the return of an inventory, appraisement,
and list of claims of the person's estate.
(b) Any person capable of making a will may provide in the
person's will that no independent administration of his or her
estate may be allowed. In such case the person's estate, if
administered, shall be administered and settled under the direction
of the probate court as other estates are required to be settled and
not as an independent administration.
Sec. 177B. CREATION IN TESTATE ESTATE BY AGREEMENT. (a)
Except as provided in Section 177A(b) of this code, if a decedent's
will names an executor but the will does not provide for independent
administration as provided in Section 177A(a) of this code, all of
the distributees of the decedent may agree on the advisability of
having an independent administration and collectively designate in
the application for probate of the decedent's will the executor
named in the will to serve as independent executor and request in
the application that no other action shall be had in the probate
court in relation to the settlement of the decedent's estate other
than the probating and recording of the decedent's will and the
return of an inventory, appraisement, and list of claims of the
decedent's estate. In such case the probate court shall enter an
order granting independent administration and appointing the
person, firm, or corporation designated in the application as
independent executor, unless the court finds that it would not be in
the best interest of the estate to do so.
(b) Except as provided in Section 177A(b) of this code, in
situations where no executor is named in the decedent's will, or in
situations where each executor named in the will is deceased or is
disqualified to serve as executor or indicates by affidavit filed
with the application for administration of the decedent's estate
the executor's inability or unwillingness to serve as executor, all
of the distributees of the decedent may agree on the advisability of
having an independent administration and collectively designate in
the application for probate of the decedent's will a qualified
person, firm, or corporation to serve as independent administrator
and request in the application that no other action shall be had in
the probate court in relation to the settlement of the decedent's
estate other than the probating and recording of the decedent's
will and the return of an inventory, appraisement, and list of
claims of the decedent's estate. In such case the probate court
shall enter an order granting independent administration and
appointing the person, firm, or corporation designated in the
application as independent administrator, unless the court finds
that it would not be in the best interest of the estate to do so.
Sec. 177C. CREATION IN INTESTATE ESTATE BY AGREEMENT. (a)
All of the distributees of a decedent dying intestate may agree on
the advisability of having an independent administration and
collectively designate in the application for administration of the
decedent's estate a qualified person, firm, or corporation to serve
as independent administrator and request in the application that no
other action shall be had in the probate court in relation to the
settlement of the decedent's estate other than the return of an
inventory, appraisement, and list of claims of the decedent's
estate. In such case the probate court shall enter an order
granting independent administration and appointing the person,
firm, or corporation designated in the application as independent
administrator, unless the court finds that it would not be in the
best interest of the estate to do so.
(b) The court shall not appoint an independent
administrator to serve in an intestate administration unless and
until the parties seeking appointment of the independent
administrator have been determined, through a proceeding to declare
heirship under Chapter III of this code, to constitute all of the
decedent's heirs.
Sec. 177D. MEANS OF ESTABLISHING DISTRIBUTEE CONSENT. (a)
This section applies to the creation of an independent
administration under Section 177B or 177C of this code.
(b) All distributees shall be served with citation and
notice of the application for independent administration unless the
distributee waives the issuance or service of citation or enters an
appearance in court.
(c) If a distributee is an incapacitated person, the
guardian of the person of the distributee may sign the application
on behalf of the distributee. If the probate court finds that
either the granting of independent administration or the
appointment of the person, firm, or corporation designated in the
application as independent executor would not be in the best
interest of the incapacitated person, then, notwithstanding
anything to the contrary in Section 177B or 177C of this code, the
court shall not enter an order granting independent administration
of the estate. If a distributee who is an incapacitated person has
no guardian of the person, the probate court may appoint a guardian
ad litem to make application on behalf of the incapacitated person
if the court considers such an appointment necessary to protect the
interest of the distributees. Alternatively, if the distributee who
is an incapacitated person is a minor and has no guardian of the
person, the natural guardian or guardians of such minor may consent
on behalf of such incapacitated person if there is no conflict of
interest between the minor and such natural guardian or guardians.
(d) If a trust is created in the decedent's will, the person
or class of persons first eligible to receive the income from the
trust, when determined as if the trust were to be in existence on
the date of the decedent's death, shall, for the purposes of Section
177B of this code, be considered to be the distributee or
distributees on behalf of such trust, and any other trust or trusts
coming into existence on the termination of such trust, and are
authorized to apply for independent administration on behalf of the
trusts without the consent or agreement of the trustee or any other
beneficiary of the trust, or the trustee or any beneficiary of any
other trust which may come into existence on the termination of such
trust. If a person who is a trust beneficiary and who is considered
to be a distributee under this subsection is an incapacitated
person, then such trustee or cotrustee may file the application or
give the consent, provided that such trustee or cotrustee is not the
person proposed to serve as the independent executor.
(e) If a life estate is created either in the decedent's
will or by law, the life tenant or life tenants, when determined as
if the life estate were to commence on the date of the decedent's
death, shall, for the purposes of Section 177B or 177C of this code,
be considered to be the distributee or distributees on behalf of the
entire estate created, and are authorized to apply for independent
administration on behalf of the estate without the consent or
approval of any remainderman.
(f) If a decedent's will contains a provision that a
distributee must survive the decedent by a prescribed period of
time in order to take under the decedent's will, then, for the
purposes of determining who shall be the distributee under Section
177B of this code and under Subsection (c) of this section, it shall
be presumed that the distributees living at the time of the filing
of the application for probate of the decedent's will survived the
decedent by the prescribed period.
(g) In the case of all decedents, whether dying testate or
intestate, for the purposes of determining who shall be the
distributees under Section 177B or 177C of this code and under
Subsection (c) of this section, it shall be presumed that no
distributee living at the time the application for independent
administration is filed shall subsequently disclaim any portion of
such distributee's interest in the decedent's estate.
(h) If a distributee of a decedent's estate should die and
if by virtue of such distributee's death such distributee's share of
the decedent's estate shall become payable to such distributee's
estate, then the deceased distributee's personal representative
may sign the application for independent administration of the
decedent's estate under Section 177B or 177C of this code and under
Subsection (c) of this section.
Sec. 177E. BOND; WAIVER OF BOND. If an independent
administration of a decedent's estate is created under Section 177B
or 177C of this code, then, unless the probate court waives bond on
application for waiver, the independent executor shall be required
to enter into bond payable to and to be approved by the judge and the
judge's successors in a sum that is found by the judge to be
adequate under all circumstances, or a bond with one surety in a sum
that is found by the judge to be adequate under all circumstances,
if the surety is an authorized corporate surety. This section does
not repeal any other section of this code.
Sec. 177F. GRANTING POWER OF SALE BY AGREEMENT. In a
situation in which a decedent does not have a will or the will does
not contain or insufficiently contains language authorizing the
personal representative to sell real property, the court may
include in an order appointing an independent executor under
Section 177B or 177C of this code such general or specific authority
regarding the power of the independent executor to sell real
property as may be consented to by the beneficiaries who are to
receive any such real property in their consents to the independent
administration. The independent executor, in such event, may sell
the real property under the authority granted in the court order
without the further consent of those beneficiaries.
Sec. 177G. NO LIABILITY OF JUDGE. Absent proof of fraud or
collusion on the part of a judge, no judge may be held civilly
liable for the commission of misdeeds or the omission of any
required act of any person, firm, or corporation designated as an
independent executor under Section 177B or 177C of this code.
Section 36 of this code does not apply to the appointment of an
independent executor under Section 177B or 177C of this code.
Sec. 177H. PERSON DECLINING TO SERVE. A person who declines
to serve or resigns as independent executor of a decedent's estate
may be appointed an executor or administrator of the estate if the
estate will be administered and settled under the direction of the
court.
PART 2. ADMINISTRATION
Sec. 177I. GENERAL SCOPE AND EXERCISE OF POWERS. When an
independent administration has been created, and the order
appointing an independent executor has been entered by the probate
court, and the inventory, appraisement, and list of claims has been
filed by the independent executor and approved by the court, as long
as the estate is represented by an independent executor, further
action of any nature shall not be had in the probate court except
where this code specifically and explicitly provides for some
action in such court.
Sec. 177J. INDEPENDENT EXECUTORS MAY ACT WITHOUT COURT
APPROVAL. Unless this code specifically provides otherwise, any
action that a personal representative subject to court supervision
may do with or without a court order may be taken by an independent
executor without a court order. The other provisions of this
chapter are designed to provide additional guidance regarding
independent administrations in specified situations, and are not
designed to limit by omission or otherwise the application of the
general principles set forth in this part.
Sec. 177K. POWER OF SALE. (a) General. (1) An independent
executor has the power of sale set forth in the will, if applicable,
exercisable without court approval as otherwise provided for
independent administrations.
(2) Unless limited by the terms of a will, an
independent executor has, in addition to any power of sale given in
the will, the same power of sale for the same purposes as personal
representatives have in a supervised administration, but without
the requirement of court approval. The procedural requirements
applicable to a supervised administration do not apply.
(b) Protection of Person Purchasing Estate Property. (1) A
person who is not a devisee or heir is not required to inquire into
the independent executor's power of sale or the propriety of the
exercise of the power of sale if the person deals with the
independent executor in good faith and:
(A) a power of sale is granted to the independent
executor in the will or in the court order appointing the
independent executor; or
(B) the independent executor provides an
affidavit, sworn to under oath and recorded in the deed records of
the county where the property is located, that the sale is necessary
or advisable for any of the purposes described in Section 341(1) of
this code.
(2) As to acts undertaken in good faith reliance, the
affidavit executed by the independent executor and described by
Subsection (b)(1)(B)of this section is conclusive proof, as between
a purchaser of property from an estate, and the personal
representative of an estate or the heirs and distributees of the
estate, with respect to the authority of the independent executor
to sell the property. The signature or joinder of any person who is
a devisee or heir and who has an interest in the property being sold
as described in this section is not necessary for the purchaser to
obtain all right, title, and interest of the estate in the property
being sold.
(3) This section does not relieve the independent
executor of any duty owing to a devisee or heir related directly or
indirectly to the sale.
(c) No Limitations. This section does not limit the
authority of an independent executor to take other actions without
court supervision or approval with respect to estate assets that
may take place in a supervised administration, for purposes and
within the scope otherwise authorized by this code, including
leases and borrowing money.
PART 3. CLAIMS; EXEMPTIONS AND ALLOWANCES
Sec. 177L. SETTING ASIDE EXEMPT PROPERTY AND ALLOWANCES.
The independent executor shall set aside and deliver to those
entitled exempt property and allowances for support, and allowances
in lieu of exempt property, as prescribed in this code, to the same
extent and result as if the independent executor's actions had been
accomplished in, and under orders of, the court.
Sec. 177M. CLAIMS. (a) Duty of the Independent Executor.
An independent executor, in the administration of an estate,
independently of and without application to, or any action in or by
the court:
(1) shall give the notices required under Sections 294
and 295 of this code;
(2) may give the notice to an unsecured creditor with a
claim for money permitted under Section 294(d) of this code and bar
a claim under Subsection (e) of this section; and
(3) may approve or reject any claim, or take no action
on a claim, and shall classify and pay claims approved or
established by suit against the estate in the same order of
priority, classification, and proration prescribed in this code.
(a-1) Statement in Notice of Claim. In order to be
effective, the notice described by Subsection (a)(2) of this
section must include, in addition to the other information required
by Section 294(d) of this code, a statement that a claim may be
effectively presented only by one of the methods described in this
section.
(b) Secured Claims for Money. Within six months after the
date letters are granted or within four months after the date notice
is received under Section 295 of this code, whichever is later, a
creditor with a claim for money secured by real or personal property
of the estate must give notice to the independent executor of the
creditor's election to have the creditor's claim approved as a
matured secured claim to be paid in due course of administration.
In addition to such notice, such creditor whose claim is secured by
real property shall record a notice of such election in the deed
records of the county in which such real property is located. If no
election to be a matured secured creditor is made, or is made but
not within the required period, or is made within the required
period but the creditor has a lien against real property and fails
to record notice of the claim in the deed records as described above
within the required period, the claim shall be a preferred debt and
lien against the specific property securing the indebtedness and
shall be paid according to the terms of the contract that secured
the lien, and the claim may not be asserted against other assets of
the estate. The independent executor may pay the claim prior to
maturity if it is determined to be in the best interest of the
estate to do so.
(c) Matured Secured Claims. (1) A claim approved as a
matured secured claim under Subsection (b) of this section shall
remain secured by any lien or security interest against the
specific property securing its payment but subordinated to the
payment from the property of claims having a higher classification
under Section 322 of this code. However, the secured creditor:
(A) shall not be entitled to exercise any
remedies in a manner that prevents the payment of such higher
priority claims and allowances; and
(B) during the administration of the estate,
shall not be entitled to exercise any contractual collection
rights, including the power to foreclose, without either the prior
written approval of the independent executor or court approval.
(1-a) Nothing in Subdivision (1) of this subsection
shall be construed to suspend or otherwise prevent a creditor with a
matured secured claim from seeking judicial relief of any kind or
executing on any judgment against an independent executor. Except
with respect to real property, any third party acting in good faith
may obtain good title with respect to an estate asset acquired
through a secured creditor's extrajudicial collection rights,
without regard to whether such creditor had the right to collect or
whether the creditor acted improperly in exercising such rights
during an estate administration due to having elected matured
secured status.
(2) If a claim approved or established by suit as a
matured secured claim is secured by property passing to one or more
devisees in accordance with Section 71A of this code, the
independent executor shall collect from the devisees the amount of
the debt and pay that amount to the claimant or sell the property
and pay out of the sale proceeds the claim and associated expenses
of sale consistent with the provisions of Section 306(c-1) of this
code applicable in court supervised administrations.
(d) Preferred Debt and Lien Claims. During an independent
administration, a secured creditor whose claim is a preferred debt
and lien against property securing the indebtedness under
Subsection (b) of this section is free to exercise any and all
judicial or extrajudicial collection rights, including foreclosure
and execution; provided, however, that such creditor shall not have
the right to conduct a nonjudicial foreclosure sale within a period
of six months after letters are granted.
(e) Certain Unsecured Claims; Barring of Claims. An
unsecured creditor who has a claim for money against an estate and
who receives a notice under Section 294(d) of this code shall give
notice to the independent executor of the nature and amount of the
claim not later than the 120th day after the date on which the
notice is received or the claim is barred.
(f) Notices Required by Creditors. Notice to the personal
representative required by Subsections (b) and (e) of this section
must be contained in:
(1) a written instrument that is hand-delivered with
proof of receipt, or mailed by certified mail, return receipt
requested with proof of receipt, to the independent executor or the
executor's attorney;
(2) a pleading filed in a lawsuit with respect to the
claim; or
(3) a written instrument or pleading filed in the
court in which the administration of the estate is pending.
(f-1) Filing Requirements Applicable. Nothing in
Subsection (f) of this section shall relieve a creditor who elects
matured secured status from the filing requirements in Subsection
(b) of this section, to the extent applicable.
(g) Statute of Limitations. Except as otherwise provided in
Section 16.062, Civil Practice and Remedies Code, the running of
the statute of limitations shall be tolled only by a written
approval of a claim signed by an independent executor, a pleading
filed in a suit pending at the time of the decedent's death, or a
suit brought by the creditor against the independent executor. In
particular, the presentation of a statement or claim, or a notice
with respect to a claim, to an independent executor shall not toll
the running of the statute of limitations with respect to that
claim.
(h) Other Claim Procedures of Code Generally Do Not Apply.
Except as otherwise provided in this section, the procedural
provisions of this code governing creditor claims in supervised
administrations do not apply in independent administrations. By way
of example only and not of limitation:
(1) Section 313 of this code does not apply in
independent administrations, and consequently a creditor's claim
shall not be barred solely because the creditor failed to file a
suit within 90 days after a claim has been rejected by an
independent executor or with respect to which the independent
executor takes no action; and
(2) Sections 306(f)-(k) of this code do not apply in
independent administrations.
(i) Liability of Independent Executor. An independent
executor, in the administration of an estate, may pay at any time
and without personal liability a claim for money against the estate
to the extent approved and classified by the personal
representative if:
(1) the claim is not barred by limitations; and
(2) at the time of payment, the independent executor
reasonably believes the estate will have sufficient assets to pay
all claims against the estate.
Sec. 177N. ENFORCEMENT OF CLAIMS BY SUIT. Any person having
a debt or claim against the estate may enforce the payment of the
same by suit against the independent executor; and, when judgment
is recovered against the independent executor, the execution shall
run against the estate of the decedent in the possession of the
independent executor that is subject to such debt. The independent
executor shall not be required to plead to any suit brought against
the executor for money until after six months after the date that an
independent administration was created and the order appointing the
executor was entered by the probate court.
Sec. 177O. REQUIRING HEIRS TO GIVE BOND. When an
independent administration is created and the order appointing an
independent executor is entered by the probate court, any person
having a debt against such estate may, by written complaint filed in
the probate court in which such order was entered, cause all
distributees of the estate, heirs at law, and other persons
entitled to any portion of such estate under the will, if any, to be
cited by personal service to appear before such probate court and
execute a bond for an amount equal to the amount of the creditor's
claim or the full value of such estate, as shown by the inventory
and list of claims, whichever is the smaller, such bond to be
payable to the judge, and the judge's successors, and to be approved
by the judge, and conditioned that all obligors shall pay all debts
that shall be established against such estate in the manner
provided by law. On the return of the citation served, unless such
person so entitled to any portion of the estate, or some of them, or
some other person for them, shall execute such bond to the
satisfaction of the probate court, such estate shall be
administered and settled under the direction of the probate court
as other estates are required to be settled. If the bond is
executed and approved, the independent administration shall
proceed. Creditors of the estate may sue on such bond, and shall be
entitled to judgment on the bond for the amount of their debt, or
they may have their action against those in possession of the
estate.
PART 4. ACCOUNTINGS, SUCCESSORS, AND OTHER REMEDIES
Sec. 177P. ACCOUNTING. (a) Interested Person May Demand
Accounting. At any time after the expiration of 15 months after the
date that an independent administration was created and the order
appointing an independent executor was entered by the probate
court, any person interested in the estate may demand an accounting
from the independent executor. The independent executor shall
furnish to the person or persons making the demand an exhibit in
writing, sworn and subscribed by the independent executor, setting
forth in detail:
(1) the property belonging to the estate that has come
into the executor's possession as executor;
(2) the disposition that has been made of such
property;
(3) the debts that have been paid;
(4) the debts and expenses, if any, still owing by the
estate;
(5) the property of the estate, if any, still
remaining in the executor's possession;
(6) such other facts as may be necessary to a full and
definite understanding of the exact condition of the estate; and
(7) such facts, if any, that show why the
administration should not be closed and the estate distributed.
(a-1) Copy of Exhibit or Accounting. Any other interested
person shall, on demand, be entitled to a copy of any exhibit or
accounting that has been made by an independent executor in
compliance with this section.
(b) Enforcement of Demand. Should the independent executor
not comply with a demand for an accounting authorized by this
section within 60 days after receipt of the demand, the person
making the demand may compel compliance by an action in the probate
court. After a hearing, the court shall enter an order requiring the
accounting to be made at such time as it considers proper under the
circumstances.
(c) Subsequent Demands. After an initial accounting has
been given by an independent executor, any person interested in an
estate may demand subsequent periodic accountings at intervals of
not less than 12 months, and such subsequent demands may be enforced
in the same manner as an initial demand.
(d) Remedies Cumulative. The right to an accounting
accorded by this section is cumulative of any other remedies which
persons interested in an estate may have against the independent
executor of the estate.
Sec. 177Q. REQUIRING INDEPENDENT EXECUTOR TO GIVE BOND.
When it has been provided by will, regularly probated, that an
independent executor appointed by such will shall not be required
to give bond for the management of the estate devised by such will,
or the independent executor is not required to give bond because
bond has been waived by court order as authorized under Section 177E
of this code, then such independent executor may be required to give
bond, on proper proceedings had for that purpose as in the case of
personal representatives in a supervised administration, if it be
made to appear at any time that such independent executor is
mismanaging the property, or has betrayed or is about to betray the
independent executor's trust, or has in some other way become
disqualified.
Sec. 177R. REMOVAL OF INDEPENDENT EXECUTOR. (a) The
probate court, on its own motion or on motion of any interested
person, after the independent executor has been cited by personal
service to answer at a time and place fixed in the notice, may
remove an independent executor when:
(1) the independent executor fails to return within 90
days after qualification, unless such time is extended by order of
the court, an inventory of the property of the estate and list of
claims that have come to the independent executor's knowledge;
(2) sufficient grounds appear to support belief that
the independent executor has misapplied or embezzled, or that the
independent executor is about to misapply or embezzle, all or any
part of the property committed to the independent executor's care;
(3) the independent executor fails to make an
accounting which is required by law to be made;
(4) the independent executor fails to timely file the
affidavit or certificate required by Section 128A of this code;
(5) the independent executor is proved to have been
guilty of gross misconduct or gross mismanagement in the
performance of the independent executor's duties; or
(6) the independent executor becomes an incapacitated
person, or is sentenced to the penitentiary, or from any other cause
becomes legally incapacitated from properly performing the
independent executor's fiduciary duties.
(b) The order of removal shall state the cause of removal
and shall direct by order the disposition of the assets remaining in
the name or under the control of the removed executor. The order of
removal shall require that letters issued to the removed executor
shall be surrendered and that all letters shall be canceled of
record. If an independent executor is removed by the court under
this section, the court may, on application, appoint a successor
independent executor as provided by Section 177T of this code.
(c) An independent executor who defends an action for the
independent executor's removal in good faith, whether successful or
not, shall be allowed out of the estate the independent executor's
necessary expenses and disbursements, including reasonable
attorney's fees, in the removal proceedings.
(d) Costs and expenses incurred by the party seeking removal
that are incident to removal of an independent executor appointed
without bond, including reasonable attorney's fees and expenses,
may be paid out of the estate.
Sec. 177S. POWERS OF AN ADMINISTRATOR WHO SUCCEEDS AN
INDEPENDENT EXECUTOR. (a) Grant of Powers by Court. Whenever a
person has died, or shall die, testate, owning property in this
state, and such person's will has been or shall be admitted to
probate by the court, and such probated will names an independent
executor or executors, or trustees acting in the capacity of
independent executors, to execute the terms and provisions of said
will, and such will grants to such independent executor, or
executors, or trustees acting in the capacity of independent
executors, the power to raise or borrow money and to mortgage, and
such independent executor, or executors, or trustees, have died or
shall die, resign, fail to qualify, or be removed from office,
leaving unexecuted parts or portions of the will of the testator,
and an administrator with the will annexed is appointed by the
probate court, and an administrator's bond is filed and approved by
the court, then in all such cases, the court may, in addition to the
powers conferred on such administrator under other provisions of
the laws of this state, authorize, direct, and empower such
administrator to do and perform the acts and deeds, clothed with the
rights, powers, authorities, and privileges, and subject to the
limitations, set forth in the subsequent provisions of this
section.
(b) Power to Borrow Money and Mortgage or Pledge Property.
The court, on application, citation, and hearing, may, by its
order, authorize, direct, and empower such administrator to raise
or borrow such sums of money and incur such obligations and debts as
the court shall, in its said order, direct, and to renew and extend
same from time to time, as the court, on application and order,
shall provide; and, if authorized by the court's order, to secure
such loans, obligations, and debts, by pledge or mortgage on
property or assets of the estate, real, personal, or mixed, on such
terms and conditions, and for such duration of time, as the court
shall consider to be in the best interests of the estate, and by its
order shall prescribe; and all such loans, obligations, debts,
pledges, and mortgages shall be valid and enforceable against the
estate and against such administrator in the administrator's
official capacity.
(c) Powers Limited to Those Granted by the Will. The court
may order and authorize such administrator to have and exercise the
powers and privileges set forth in Subsection (a) or (b) of this
section only to the extent that same are granted to or possessed by
the independent executor, or executors, or trustees acting in the
capacity of independent executors, under the terms of the probated
will of such deceased person, and then only in such cases as it
appears, at the hearing of the application, that at the time of the
appointment of such administrator, there are outstanding and unpaid
obligations and debts of the estate, or of the independent
executor, or executors, or trustees, chargeable against the estate,
or unpaid expenses of administration, or when the court appointing
such administrator orders the business of such estate to be carried
on and it becomes necessary, from time to time, under orders of the
court, for such administrator to borrow money and incur obligations
and indebtedness in order to protect and preserve the estate.
(d) Powers Other Than Those Relating to Borrowing Money and
Mortgaging or Pledging Property. The court, in addition, may, on
application, citation, and hearing, order, authorize, and empower
such administrator to assume, exercise, and discharge, under the
orders and directions of said court, made from time to time, all or
such part of the rights, powers, and authorities vested in and
delegated to, or possessed by, the independent executor, or
executors, or trustees acting in the capacity of independent
executors, under the terms of the will of such deceased person, as
the court finds to be in the best interests of the estate and shall,
from time to time, order and direct.
(e) Application for Grant of Powers. The granting to such
administrator by the court of some, or all, of the powers and
authorities set forth in this section shall be on application filed
by such administrator with the county clerk, setting forth such
facts as, in the judgment of the administrator, require the
granting of the power or authority requested.
(f) Citation. On the filing of such application, the clerk
shall issue citation to all persons interested in the estate,
stating the nature of the application, and requiring such persons
to appear on the return day named in such citation and show cause
why such application should not be granted, should they choose to do
so. Such citation shall be served by posting.
(g) Hearing and Order. The court shall hear such
application and evidence on the application, on or after the return
day named in the citation, and, if satisfied a necessity exists and
that it would be in the best interests of the estate to grant said
application in whole or in part, the court shall so order;
otherwise, the court shall refuse said application.
Sec. 177T. COURT-APPOINTED SUCCESSOR INDEPENDENT EXECUTOR.
(a) If the will of a person who dies testate names an independent
executor who, having qualified, fails for any reason to continue to
serve, or is removed for cause by the court, and the will does not
name a successor independent executor or if each successor executor
named in the will fails for any reason to qualify as executor or
indicates by affidavit filed with the application for an order
continuing independent administration the successor executor's
inability or unwillingness to serve as successor independent
executor, all of the distributees of the decedent as of the filing
of the application for an order continuing independent
administration may apply to the probate court for the appointment
of a qualified person, firm, or corporation to serve as successor
independent executor. If the probate court finds that continued
administration of the estate is necessary, the probate court shall
enter an order continuing independent administration and
appointing the person, firm, or corporation designated in the
application as successor independent executor, unless the probate
court finds that it would not be in the best interests of the estate
to do so. Such successor shall serve with all of the powers and
privileges granted to the successor's predecessor independent
executor.
(b) If a distributee described in this section is an
incapacitated person, the guardian of the person of the distributee
may sign the application on behalf of the distributee. If the
probate court finds that either the continuing of independent
administration or the appointment of the person, firm, or
corporation designated in the application as successor independent
executor would not be in the best interest of the incapacitated
person, then, notwithstanding Subsection (a) of this section, the
probate court may not enter an order continuing independent
administration of the estate. If the distributee is an
incapacitated person and has no guardian of the person, the court
may appoint a guardian ad litem to make application on behalf of the
incapacitated person if the probate court considers such an
appointment necessary to protect the interest of such distributee.
(c) If a trust is created in the decedent's will, the person
or class of persons first eligible to receive the income from the
trust, determined as if the trust were to be in existence on the
date of the filing of the application for an order continuing
independent administration, shall, for the purposes of this
section, be considered to be the distributee or distributees on
behalf of such trust, and any other trust or trusts coming into
existence on the termination of such trust, and are authorized to
apply for an order continuing independent administration on behalf
of the trust without the consent or agreement of the trustee or any
other beneficiary of the trust, or the trustee or any beneficiary of
any other trust which may come into existence on the termination of
such trust.
(d) If a life estate is created either in the decedent's
will or by law, and if a life tenant is living at the time of the
filing of the application for an order continuing independent
administration, then the life tenant or life tenants, determined as
if the life estate were to commence on the date of the filing of the
application for an order continuing independent administration,
shall, for the purposes of this section, be considered to be the
distributee or distributees on behalf of the entire estate created,
and are authorized to apply for an order continuing independent
administration on behalf of the estate without the consent or
approval of any remainderman.
(e) If a decedent's will contains a provision that a
distributee must survive the decedent by a prescribed period of
time in order to take under the decedent's will, for the purposes of
determining who shall be the distributee under this section, it
shall be presumed that the distributees living at the time of the
filing of the application for an order continuing independent
administration of the decedent's estate survived the decedent for
the prescribed period.
(f) In the case of all decedents, for the purposes of
determining who shall be the distributees under this section, it
shall be presumed that no distributee living at the time the
application for an order continuing independent administration of
the decedent's estate is filed shall subsequently disclaim any
portion of such distributee's interest in the decedent's estate.
(g) If a distributee of a decedent's estate should die, and
if by virtue of such distributee's death such distributee's share of
the decedent's estate shall become payable to such distributee's
estate, then the deceased distributee's personal representative
may sign the application for an order continuing independent
administration of the decedent's estate under this section.
(h) If a successor independent executor is appointed under
this section, then, unless the probate court shall waive bond on
application for waiver, the successor independent executor shall be
required to enter into bond payable to and to be approved by the
judge and the judge's successors in a sum that is found by the judge
to be adequate under all circumstances, or a bond with one surety in
an amount that is found by the judge to be adequate under all
circumstances, if the surety is an authorized corporate surety.
(i) Absent proof of fraud or collusion on the part of a
judge, the judge may not be held civilly liable for the commission
of misdeeds or the omission of any required act of any person, firm,
or corporation designated as a successor independent executor under
this section. Section 36 of this code does not apply to an
appointment of a successor independent executor under this section.
PART 5. CLOSING AND DISTRIBUTIONS
Sec. 177U. ACCOUNTING AND DISTRIBUTION. (a) In addition to
or in lieu of the right to an accounting provided by Section 177P of
this code, at any time after the expiration of two years after the
date that an independent administration was created and the order
appointing an independent executor was entered, a person interested
in the estate may petition the court for an accounting and
distribution. The court may order an accounting to be made with the
court by the independent executor at such time as the court
considers proper. The accounting shall include the information that
the court considers necessary to determine whether any part of the
estate should be distributed.
(b) On receipt of the accounting and, after notice to the
independent executor and a hearing, unless the court finds a
continued necessity for administration of the estate, the court
shall order its distribution by the independent executor to the
distributees entitled to the property. If the court finds there is
a continued necessity for administration of the estate, the court
shall order the distribution of any portion of the estate that the
court finds should not be subject to further administration by the
independent executor. If any portion of the estate that is ordered
to be distributed is incapable of distribution without prior
partition or sale, the court shall order partition and
distribution, or sale, in the manner provided for the partition and
distribution of property incapable of division in supervised
estates.
(c) If all the property in the estate is ordered distributed
by the court and the estate is fully administered, the court may
also order the independent executor to file a final account with the
court and may enter an order closing the administration and
terminating the power of the independent executor to act as
executor.
Sec. 177V. RECEIPTS AND RELEASES FOR DISTRIBUTIONS BY
INDEPENDENT EXECUTOR. (a) An independent executor may not be
required to deliver tangible or intangible personal property to a
distributee unless the independent executor shall receive, at or
before the time of delivery of the property, a signed receipt or
other proof of delivery of the property to the distributee.
(b) An independent executor may not require a waiver or
release from the distributee as a condition of delivery of property
to a distributee.
Sec. 177W. JUDICIAL DISCHARGE OF INDEPENDENT EXECUTOR. (a)
After an estate has been administered and if there is no further
need for an independent administration of the estate, the
independent executor of the estate may file an action for
declaratory judgment under Chapter 37, Civil Practice and Remedies
Code, seeking to discharge the independent executor from any
liability involving matters relating to the past administration of
the estate that have been fully and fairly disclosed.
(b) On the filing of an action under this section, each
beneficiary of the estate shall be personally served with citation,
except for a beneficiary who has waived the issuance and service of
citation.
(c) In a proceeding under this section, the court may
require the independent executor to file a final account that
includes any information the court considers necessary to
adjudicate the independent executor's request for a discharge of
liability. The court may audit, settle, or approve a final account
filed under this subsection.
(d) On or before filing an action under this section, the
independent executor must distribute to the beneficiaries of the
estate any of the remaining assets or property of the estate that
remains in the independent executor's possession after all of the
estate's debts have been paid, except for a reasonable reserve of
assets that the independent executor may retain in a fiduciary
capacity pending court approval of the final account. The court may
review the amount of assets on reserve and may order the independent
executor to make further distributions under this section.
(e) Except as ordered by the court, the independent executor
is entitled to pay from the estate legal fees, expenses, or other
costs incurred in relation to a proceeding for judicial discharge
filed under this section. The independent executor shall be
personally liable to refund any amount of such fees, expenses, or
other costs not approved by the court as a proper charge against the
estate.
Sec. 177X. CLOSING INDEPENDENT ADMINISTRATION BY CLOSING
REPORT OR NOTICE OF CLOSING ESTATE. When all of the debts known to
exist against the estate have been paid, or when they have been paid
so far as the assets in the independent executor's possession will
permit, when there is no pending litigation, and when the
independent executor has distributed to the distributees entitled
to the estate all assets of the estate, if any, remaining after
payment of debts, the independent executor may file with the court a
closing report or a notice of closing of the estate.
(a) Closing Report. An independent executor may file a
closing report verified by affidavit that:
(1) shows:
(A) the property of the estate that came into the
independent executor's possession;
(B) the debts that have been paid;
(C) the debts, if any, still owing by the estate;
(D) the property of the estate, if any, remaining
on hand after payment of debts; and
(E) the names and addresses of the distributees
to whom the property of the estate, if any, remaining on hand after
payment of debts has been distributed; and
(2) includes signed receipts or other proof of
delivery of property to the distributees named in the closing
report if the closing report reflects that there was property
remaining on hand after payment of debts.
(b) Notice of Closing Estate. (1) An independent executor
is not required to but may file a notice of closing estate verified
by affidavit that states:
(A) that all debts known to exist against the
estate have been paid or that the debts have been paid so far as the
assets in the possession of the independent executor will permit;
(B) that all remaining assets of the estate, if
any, have been distributed; and
(C) the names and addresses of the distributees
to whom the property of the estate, if any, remaining on hand after
payment of debts has been distributed.
(2) Before filing the notice, the independent executor
shall provide all distributees of the estate with a copy of the
notice of closing estate. The notice of closing estate filed by the
independent executor shall include signed receipts or other proof
that all distributees have received a copy of the notice of closing
estate.
(c) Effect of Filing Closing Report or Notice of Closing
Estate. (1) The independent administration of an estate shall be
considered closed 30 days after the filing of a closing report or
notice of closing estate unless an interested person files an
objection within the 30-day period. If an interested person files
an objection, the independent administration of the estate shall be
closed when the objection has been disposed of or the court signs an
order closing the estate.
(2) The closing of an independent administration by
filing of a closing report or notice of closing estate terminates
the power and authority of the independent executor, but does not
relieve the independent executor from liability for any
mismanagement of the estate or from liability for any false
statements contained in the report or notice.
(3) When a closing report or notice of closing estate
has been filed, persons dealing with properties of the estate, or
with claims against the estate, shall deal directly with the
distributees of the estate; and the acts of such distributees with
respect to such properties or claims shall in all ways be valid and
binding as regards the persons with whom they deal, notwithstanding
any false statements made by the independent executor in such
report or notice.
(4) If the independent executor is required to give
bond, the independent executor's filing of the closing report and
proof of delivery, if required, automatically releases the sureties
on the bond from all liability for the future acts of the principal.
The filing of a notice of closing estate does not release the
sureties on the bond of an independent executor.
(5) An independent executor's closing report or notice
of closing estate shall constitute sufficient legal authority to
all persons owing any money, having custody of any property, or
acting as registrar or transfer agent or trustee of any evidence of
interest, indebtedness, property, or right that belongs to the
estate, for payment or transfer without additional administration
to the distributees described in the will as entitled to receive the
particular asset or who as heirs at law are entitled to receive the
asset. The distributees described in the will as entitled to
receive the particular asset or the heirs at law entitled to receive
the asset may enforce their right to the payment or transfer by
suit.
Sec. 177Y. PARTITION AND DISTRIBUTION OR SALE OF PROPERTY
INCAPABLE OF DIVISION. If the will does not distribute the entire
estate of the testator or provide a means for partition of the
estate, or if no will was probated, the independent executor may,
but may not be required to, petition the probate court for either a
partition and distribution of the estate or an order of sale of any
portion of the estate alleged by the independent executor and found
by the court to be incapable of a fair and equal partition and
distribution, or both. The estate or portion of the estate shall
either be partitioned and distributed or sold, or both, in the
manner provided for the partition and distribution of property and
the sale of property incapable of division in supervised estates.
Sec. 177Z. CLOSING INDEPENDENT ADMINISTRATION ON
APPLICATION BY DISTRIBUTEE. (a) At any time after an estate has
been fully administered and there is no further need for an
independent administration of such estate, any distributee may file
an application to close the administration; and, after citation on
the independent executor, and on hearing, the court may enter an
order:
(1) requiring the independent executor to file a
closing report meeting the requirements of Section 177X of this
code;
(2) closing the administration;
(3) terminating the power of the independent executor
to act as such; and
(4) releasing the sureties on any bond the independent
executor was required to give from all liability for the future acts
of the principal.
(b) The order of the court closing the independent
administration shall constitute sufficient legal authority to all
persons owing any money, having custody of any property, or acting
as registrar or transfer agent or trustee of any evidence of
interest, indebtedness, property, or right that belongs to the
estate, for payment or transfer without additional administration
to the distributees described in the will as entitled to receive the
particular asset or who as heirs at law are entitled to receive the
asset. The distributees described in the will as entitled to
receive the particular asset or the heirs at law entitled to receive
the asset may enforce their right to the payment or transfer by
suit.
Sec. 177AA. ISSUANCE OF LETTERS. At any time before the
authority of an independent executor has been terminated in the
manner set forth in this chapter, the clerk shall issue such number
of letters testamentary as the independent executor shall request.
Sec. 177BB. RIGHTS AND REMEDIES CUMULATIVE. The rights and
remedies conferred by this part are cumulative of other rights and
remedies to which a person interested in the estate may be entitled
under law.
Sec. 177CC. CLOSING PROCEDURES NOT REQUIRED. An independent
executor is not required to close the independent administration of
an estate under Section 177W or 177X of this code.
SECTION 1.02. Section 3(q), Texas Probate Code, is amended
to read as follows:
(q) "Independent executor" means the personal
representative of an estate under independent administration as
provided in Chapter VI-1 [Section 145] of this Code. The term
"independent executor" includes the term "independent
administrator."
SECTION 1.03. Section 5A(b), Texas Probate Code, is amended
to read as follows:
(b) In proceedings in the statutory probate courts, the
phrases "appertaining to estates" and "incident to an estate" in
this Code include the probate of wills, the issuance of letters
testamentary and of administration, and the determination of
heirship, and also include, but are not limited to, all claims by or
against an estate, all actions for trial of title to land and for
the enforcement of liens thereon, all actions for trial of the right
of property, all actions to construe wills, the interpretation and
administration of testamentary trusts and the applying of
constructive trusts, and generally all matters relating to the
collection, settlement, partition, and distribution of estates of
deceased persons. All statutory probate courts may, in the
exercise of their jurisdiction, notwithstanding any other
provisions of this Code, hear all suits, actions, and applications
filed against or on behalf of any heirship proceeding or decedent's
estate, including estates administered by an independent executor;
all such suits, actions, and applications are appertaining to and
incident to an estate. This subsection shall be construed in
conjunction with and in harmony with Chapter VI-1 of this Code
[Section 145] and all other sections of this Code dealing with
independent executors, but shall not be construed so as to increase
permissible judicial control over independent executors. Except
for situations in which the jurisdiction of a statutory probate
court is concurrent with that of a district court as provided by
Section 5(e) of this Code or any other court, any cause of action
appertaining to estates or incident to an estate shall be brought in
a statutory probate court.
SECTION 1.04. Section 5C(a), Texas Probate Code, is amended
to read as follows:
(a) This section applies only to a decedent's estate that:
(1) is being administered in a pending probate
proceeding;
(2) owns or claims an interest in property against
which a taxing unit has imposed ad valorem taxes that are
delinquent; and
(3) is not being administered as an independent
administration under Chapter VI-1 [Section 145] of this code.
SECTION 1.05. Section 110, Texas Probate Code, is amended
to read as follows:
Sec. 110. REQUIREMENTS FOR EMERGENCY INTERVENTION. An
applicant may file an emergency application with the court under
Section 108 of this code only if an application has not been filed
and is not pending under Section 81, 82, or 137 of this code[,] or
Part 1, Chapter VI-1 [145] of this code and the applicant:
(1) needs to obtain funds for the funeral and burial of
the decedent; or
(2) needs to gain access to rental accommodations in
which the decedent's personal property is located and the applicant
has been denied access to those accommodations.
SECTION 1.06. Section 241(a), Texas Probate Code, is
amended to read as follows:
(a) Executors, administrators, and temporary
administrators shall be entitled to receive a commission of five
per cent (5%) on all sums they may actually receive in cash, and the
same per cent on all sums they may actually pay out in cash, in the
administration of the estate on a finding by the court that the
executor or administrator has taken care of and managed the estate
in compliance with the standards of this code; provided, no
commission shall be allowed for receiving funds belonging to the
testator or intestate which were on hand or were held for the
testator or intestate at the time of his death in a financial
institution or a brokerage firm, including cash or a cash
equivalent held in a checking account, savings account, certificate
of deposit, or money market account; nor for collecting the
proceeds of any life insurance policy; nor for paying out cash to
the heirs or legatees as such; provided, further, however, that in
no event shall the executor or administrator be entitled in the
aggregate to more than five per cent (5%) of the gross fair market
value of the estate subject to administration. If the executor or
administrator manages a farm, ranch, factory, or other business of
the estate, or if the compensation as calculated above is
unreasonably low, the court may allow him reasonable compensation
for his services, including unusual effort to collect funds or life
insurance. For this purpose, the county court shall have
jurisdiction to receive, consider, and act on applications from
independent executors. The court may, on application of an
interested person or on its own motion, deny a commission allowed by
this subsection in whole or in part if:
(1) the court finds that the executor or administrator
has not taken care of and managed estate property prudently; or
(2) the executor or administrator has been removed
under Section [149C or] 222 of this code or Part 4, Chapter VI-1 of
this code.
SECTION 1.07. Notwithstanding the transfer of Sections 145,
146, 147, 148, 149, 149A, 149B, 149C, 149D, 149E, 149F, 149G, 150,
151, 152, 153, 154, and 154A, Texas Probate Code, to the Estates and
Guardianships Code, as adopted by H.B. No. 2502 or S.B. No. 2071,
Acts of the 81st Legislature, Regular Session, 2009, by one of those
Acts, Sections 145, 146, 147, 148, 149, 149A, 149B, 149C, 149D,
149E, 149F, 149G, 150, 151, 152, 153, 154, and 154A, Texas Probate
Code, are repealed.
SECTION 1.08. The changes in law made by this article apply
only to the estate of a decedent who dies on or after the effective
date of this Act. The estate of a decedent who dies before the
effective date of this Act is governed by the law in effect on the
date of the decedent's death, and the former law is continued in
effect for that purpose.
ARTICLE 2. INDEPENDENT ADMINISTRATION: ESTATES AND GUARDIANSHIPS
CODE
SECTION 2.01. Effective January 1, 2014, Subtitle I, Title
2, Estates and Guardianships Code, as adopted by H.B. 2502 or S.B.
2071, Acts of the 81st Legislature, Regular Session, 2009, is
amended by adding Chapters 401, 402, 403, 404, and 405 to read as
follows:
CHAPTER 401. CREATION
Sec. 401.001. EXPRESSION OF TESTATOR'S INTENT IN WILL. (a)
Any person capable of making a will may provide in the person's will
that no other action shall be had in the probate court in relation
to the settlement of the person's estate than the probating and
recording of the will and the return of an inventory, appraisement,
and list of claims of the person's estate.
(b) Any person capable of making a will may provide in the
person's will that no independent administration of his or her
estate may be allowed. In such case the person's estate, if
administered, shall be administered and settled under the direction
of the probate court as other estates are required to be settled and
not as an independent administration.
Sec. 401.002. CREATION IN TESTATE ESTATE BY AGREEMENT. (a)
Except as provided in Section 401.001(b), if a decedent's will
names an executor but the will does not provide for independent
administration as provided in Section 401.001(a), all of the
distributees of the decedent may agree on the advisability of
having an independent administration and collectively designate in
the application for probate of the decedent's will the executor
named in the will to serve as independent executor and request in
the application that no other action shall be had in the probate
court in relation to the settlement of the decedent's estate other
than the probating and recording of the decedent's will and the
return of an inventory, appraisement, and list of claims of the
decedent's estate. In such case the probate court shall enter an
order granting independent administration and appointing the
person, firm, or corporation designated in the application as
independent executor, unless the court finds that it would not be in
the best interest of the estate to do so.
(b) Except as provided in Section 401.001(b), in situations
where no executor is named in the decedent's will, or in situations
where each executor named in the will is deceased or is disqualified
to serve as executor or indicates by affidavit filed with the
application for administration of the decedent's estate the
executor's inability or unwillingness to serve as executor, all of
the distributees of the decedent may agree on the advisability of
having an independent administration and collectively designate in
the application for probate of the decedent's will a qualified
person, firm, or corporation to serve as independent administrator
and request in the application that no other action shall be had in
the probate court in relation to the settlement of the decedent's
estate other than the probating and recording of the decedent's
will and the return of an inventory, appraisement, and list of
claims of the decedent's estate. In such case the probate court
shall enter an order granting independent administration and
appointing the person, firm, or corporation designated in the
application as independent administrator, unless the court finds
that it would not be in the best interest of the estate to do so.
Sec. 401.003. CREATION IN INTESTATE ESTATE BY AGREEMENT.
(a) All of the distributees of a decedent dying intestate may agree
on the advisability of having an independent administration and
collectively designate in the application for administration of the
decedent's estate a qualified person, firm, or corporation to serve
as independent administrator and request in the application that no
other action shall be had in the probate court in relation to the
settlement of the decedent's estate other than the return of an
inventory, appraisement, and list of claims of the decedent's
estate. In such case the probate court shall enter an order
granting independent administration and appointing the person,
firm, or corporation designated in the application as independent
administrator, unless the court finds that it would not be in the
best interest of the estate to do so.
(b) The court shall not appoint an independent
administrator to serve in an intestate administration unless and
until the parties seeking appointment of the independent
administrator have been determined, through a proceeding to declare
heirship under Chapter 202, to constitute all of the decedent's
heirs.
Sec. 401.004. MEANS OF ESTABLISHING DISTRIBUTEE CONSENT.
(a) This section applies to the creation of an independent
administration under Section 401.002 or 401.003.
(b) All distributees shall be served with citation and
notice of the application for independent administration unless the
distributee waives the issuance or service of citation or enters an
appearance in court.
(c) If a distributee is an incapacitated person, the
guardian of the person of the distributee may sign the application
on behalf of the distributee. If the probate court finds that
either the granting of independent administration or the
appointment of the person, firm, or corporation designated in the
application as independent executor would not be in the best
interest of the incapacitated person, then, notwithstanding
anything to the contrary in Section 401.002 or 401.003, the court
shall not enter an order granting independent administration of the
estate. If a distributee who is an incapacitated person has no
guardian of the person, the probate court may appoint a guardian ad
litem to make application on behalf of the incapacitated person if
the court considers such an appointment necessary to protect the
interest of the distributees. Alternatively, if the distributee who
is an incapacitated person is a minor and has no guardian of the
person, the natural guardian or guardians of such minor may consent
on behalf of such incapacitated person if there is no conflict of
interest between the minor and such natural guardian or guardians.
(d) If a trust is created in the decedent's will, the person
or class of persons first eligible to receive the income from the
trust, when determined as if the trust were to be in existence on
the date of the decedent's death, shall, for the purposes of Section
401.002, be considered to be the distributee or distributees on
behalf of such trust, and any other trust or trusts coming into
existence on the termination of such trust, and are authorized to
apply for independent administration on behalf of the trusts
without the consent or agreement of the trustee or any other
beneficiary of the trust, or the trustee or any beneficiary of any
other trust which may come into existence on the termination of such
trust. If a person who is a trust beneficiary and who is considered
to be a distributee under this subsection is an incapacitated
person, then such trustee or cotrustee may file the application or
give the consent, provided that such trustee or cotrustee is not the
person proposed to serve as the independent executor.
(e) If a life estate is created either in the decedent's
will or by law, the life tenant or life tenants, when determined as
if the life estate were to commence on the date of the decedent's
death, shall, for the purposes of Section 401.002 or 401.003, be
considered to be the distributee or distributees on behalf of the
entire estate created, and are authorized to apply for independent
administration on behalf of the estate without the consent or
approval of any remainderman.
(f) If a decedent's will contains a provision that a
distributee must survive the decedent by a prescribed period of
time in order to take under the decedent's will, then, for the
purposes of determining who shall be the distributee under Section
401.002 and under Subsection (c), it shall be presumed that the
distributees living at the time of the filing of the application for
probate of the decedent's will survived the decedent by the
prescribed period.
(g) In the case of all decedents, whether dying testate or
intestate, for the purposes of determining who shall be the
distributees under Section 401.002 or 401.003 and under Subsection
(c), it shall be presumed that no distributee living at the time the
application for independent administration is filed shall
subsequently disclaim any portion of such distributee's interest in
the decedent's estate.
(h) If a distributee of a decedent's estate should die and
if by virtue of such distributee's death such distributee's share of
the decedent's estate shall become payable to such distributee's
estate, then the deceased distributee's personal representative
may sign the application for independent administration of the
decedent's estate under Section 401.002 or 401.003 and under
Subsection (c).
Sec. 401.005. BOND; WAIVER OF BOND. If an independent
administration of a decedent's estate is created under Section
401.002 or 401.003, then, unless the probate court waives bond on
application for waiver, the independent executor shall be required
to enter into bond payable to and to be approved by the judge and the
judge's successors in a sum that is found by the judge to be
adequate under all circumstances, or a bond with one surety in a sum
that is found by the judge to be adequate under all circumstances,
if the surety is an authorized corporate surety. This section does
not repeal any other section of this title.
Sec. 401.006. GRANTING POWER OF SALE BY AGREEMENT. In a
situation in which a decedent does not have a will or the will does
not contain or insufficiently contains language authorizing the
personal representative to sell real property, the court may
include in an order appointing an independent executor under
Section 401.002 or 401.003 such general or specific authority
regarding the power of the independent executor to sell real
property as may be consented to by the beneficiaries who are to
receive any such real property in their consents to the independent
administration. The independent executor, in such event, may sell
the real property under the authority granted in the court order
without the further consent of those beneficiaries.
Sec. 401.007. NO LIABILITY OF JUDGE. Absent proof of fraud
or collusion on the part of a judge, no judge may be held civilly
liable for the commission of misdeeds or the omission of any
required act of any person, firm, or corporation designated as an
independent executor under Section 401.002 or 401.003. Section
351.354 does not apply to the appointment of an independent
executor under Section 401.002 or 401.003.
Sec. 401.008. PERSON DECLINING TO SERVE. A person who
declines to serve or resigns as independent executor of a
decedent's estate may be appointed an executor or administrator of
the estate if the estate will be administered and settled under the
direction of the court.
CHAPTER 402. ADMINISTRATION
Sec. 402.001. GENERAL SCOPE AND EXERCISE OF POWERS. When an
independent administration has been created, and the order
appointing an independent executor has been entered by the probate
court, and the inventory, appraisement, and list of claims has been
filed by the independent executor and approved by the court, as long
as the estate is represented by an independent executor, further
action of any nature shall not be had in the probate court except
where this title specifically and explicitly provides for some
action in such court.
Sec. 402.002. INDEPENDENT EXECUTORS MAY ACT WITHOUT COURT
APPROVAL. Unless this title specifically provides otherwise, any
action that a personal representative subject to court supervision
may do with or without a court order may be taken by an independent
executor without a court order. The other provisions of this
subtitle are designed to provide additional guidance regarding
independent administrations in specified situations, and are not
designed to limit by omission or otherwise the application of the
general principles set forth in this chapter.
Sec. 402.003. POWER OF SALE. (a) General. (1) An
independent executor has the power of sale set forth in the will, if
applicable, exercisable without court approval as otherwise
provided for independent administrations.
(2) Unless limited by the terms of a will, an
independent executor has, in addition to any power of sale given in
the will, the same power of sale for the same purposes as personal
representatives have in a supervised administration, but without
the requirement of court approval. The procedural requirements
applicable to a supervised administration do not apply.
(b) Protection of Person Purchasing Estate Property. (1) A
person who is not a devisee or heir is not required to inquire into
the independent executor's power of sale or the propriety of the
exercise of the power of sale if the person deals with the
independent executor in good faith and:
(A) a power of sale is granted to the independent
executor in the will or in the court order appointing the
independent executor; or
(B) the independent executor provides an
affidavit, sworn to under oath and recorded in the deed records of
the county where the property is located, that the sale is necessary
or advisable for any of the purposes described in Section
356.251(1).
(2) As to acts undertaken in good faith reliance, the
affidavit executed by the independent executor and described by
Subsection (b)(1)(B) is conclusive proof, as between a purchaser of
property from an estate, and the personal representative of an
estate or the heirs and distributees of the estate, with respect to
the authority of the independent executor to sell the property. The
signature or joinder of any person who is a devisee or heir and who
has an interest in the property being sold as described in this
section is not necessary for the purchaser to obtain all right,
title, and interest of the estate in the property being sold.
(3) This section does not relieve the independent
executor of any duty owing to a devisee or heir related directly or
indirectly to the sale.
(c) No Limitations. This section does not limit the
authority of an independent executor to take other actions without
court supervision or approval with respect to estate assets that
may take place in a supervised administration, for purposes and
within the scope otherwise authorized by this title, including
leases and borrowing money.
CHAPTER 403. CLAIMS; EXEMPTIONS AND ALLOWANCES
Sec. 403.001. SETTING ASIDE EXEMPT PROPERTY AND ALLOWANCES.
The independent executor shall set aside and deliver to those
entitled exempt property and allowances for support, and allowances
in lieu of exempt property, as prescribed in this title, to the same
extent and result as if the independent executor's actions had been
accomplished in, and under orders of, the court.
Sec. 403.002. CLAIMS. (a) Duty of the Independent
Executor. An independent executor, in the administration of an
estate, independently of and without application to, or any action
in or by the court:
(1) shall give the notices required under Sections
308.051, 308.052, 308.053, and 308.054;
(2) may give the notice to an unsecured creditor with a
claim for money permitted under Section 308.054 and bar a claim
under Subsection (e); and
(3) may approve or reject any claim, or take no action
on a claim, and shall classify and pay claims approved or
established by suit against the estate in the same order of
priority, classification, and proration prescribed in this title.
(a-1) Statement in Notice of Claim. In order to be
effective, the notice described by Subsection (a)(2) must include,
in addition to the other information required by Section 308.054, a
statement that a claim may be effectively presented only by one of
the methods described in this section.
(b) Secured Claims for Money. Within six months after the
date letters are granted or within four months after the date notice
is received under Section 308.053, whichever is later, a creditor
with a claim for money secured by real or personal property of the
estate must give notice to the independent executor of the
creditor's election to have the creditor's claim approved as a
matured secured claim to be paid in due course of administration.
In addition to such notice, such creditor whose claim is secured by
real property shall record a notice of such election in the deed
records of the county in which such real property is located. If no
election to be a matured secured creditor is made, or is made but
not within the required period, or is made within the required
period but the creditor has a lien against real property and fails
to record notice of the claim in the deed records as described above
within the required period, the claim shall be a preferred debt and
lien against the specific property securing the indebtedness and
shall be paid according to the terms of the contract that secured
the lien, and the claim may not be asserted against other assets of
the estate. The independent executor may pay the claim prior to
maturity if it is determined to be in the best interest of the
estate to do so.
(c) Matured Secured Claims. (1) A claim approved as a
matured secured claim under Subsection (b) shall remain secured by
any lien or security interest against the specific property
securing its payment but subordinated to the payment from the
property of claims having a higher classification under Section
355.102. However, the secured creditor:
(A) shall not be entitled to exercise any
remedies in a manner that prevents the payment of such higher
priority claims and allowances; and
(B) during the administration of the estate,
shall not be entitled to exercise any contractual collection
rights, including the power to foreclose, without either the prior
written approval of the independent executor or court approval.
(1-a) Nothing in Subdivision (1) shall be construed to
suspend or otherwise prevent a creditor with a matured secured
claim from seeking judicial relief of any kind or executing on any
judgment against an independent executor. Except with respect to
real property, any third party acting in good faith may obtain good
title with respect to an estate asset acquired through a secured
creditor's extrajudicial collection rights, without regard to
whether such creditor had the right to collect or whether the
creditor acted improperly in exercising such rights during an
estate administration due to having elected matured secured status.
(2) If a claim approved or established by suit as a
matured secured claim is secured by property passing to one or more
devisees in accordance with Subchapter G, Chapter 255, the
independent executor shall collect from the devisees the amount of
the debt and pay that amount to the claimant or sell the property
and pay out of the sale proceeds the claim and associated expenses
of sale consistent with the provisions of Sections 355.153(b), (c),
(d), and (e) applicable in court supervised administrations.
(d) Preferred Debt and Lien Claims. During an independent
administration, a secured creditor whose claim is a preferred debt
and lien against property securing the indebtedness under
Subsection (b) is free to exercise any and all judicial or
extrajudicial collection rights, including foreclosure and
execution; provided, however, that such creditor shall not have the
right to conduct a nonjudicial foreclosure sale within a period of
six months after letters are granted.
(e) Certain Unsecured Claims; Barring of Claims. An
unsecured creditor who has a claim for money against an estate and
who receives a notice under Section 308.054 shall give notice to the
independent executor of the nature and amount of the claim not later
than the 120th day after the date on which the notice is received or
the claim is barred.
(f) Notices Required by Creditors. Notice to the personal
representative required by Subsections (b) and (e) must be
contained in:
(1) a written instrument that is hand-delivered with
proof of receipt, or mailed by certified mail, return receipt
requested with proof of receipt, to the independent executor or the
executor's attorney;
(2) a pleading filed in a lawsuit with respect to the
claim; or
(3) a written instrument or pleading filed in the
court in which the administration of the estate is pending.
(f-1) Filing Requirements Applicable. Nothing in
Subsection (f) shall relieve a creditor who elects matured secured
status from the filing requirements in Subsection (b), to the
extent applicable.
(g) Statute of Limitations. Except as otherwise provided in
Section 16.062, Civil Practice and Remedies Code, the running of
the statute of limitations shall be tolled only by a written
approval of a claim signed by an independent executor, a pleading
filed in a suit pending at the time of the decedent's death, or a
suit brought by the creditor against the independent executor. In
particular, the presentation of a statement or claim, or a notice
with respect to a claim, to an independent executor shall not toll
the running of the statute of limitations with respect to that
claim.
(h) Other Claim Procedures of Code Generally Do Not Apply.
Except as otherwise provided in this section, the procedural
provisions of this title governing creditor claims in supervised
administrations do not apply in independent administrations. By way
of example only and not of limitation:
(1) Sections 355.064 and 355.066 do not apply in
independent administrations, and consequently a creditor's claim
shall not be barred solely because the creditor failed to file a
suit within 90 days after a claim has been rejected by an
independent executor or with respect to which the independent
executor takes no action; and
(2) Sections 355.156, 355.157, 355.158, 355.159, and
355.160 do not apply in independent administrations.
(i) Liability of Independent Executor. An independent
executor, in the administration of an estate, may pay at any time
and without personal liability a claim for money against the estate
to the extent approved and classified by the personal
representative if:
(1) the claim is not barred by limitations; and
(2) at the time of payment, the independent executor
reasonably believes the estate will have sufficient assets to pay
all claims against the estate.
Sec. 403.003. ENFORCEMENT OF CLAIMS BY SUIT. Any person
having a debt or claim against the estate may enforce the payment of
the same by suit against the independent executor; and, when
judgment is recovered against the independent executor, the
execution shall run against the estate of the decedent in the
possession of the independent executor that is subject to such
debt. The independent executor shall not be required to plead to
any suit brought against the executor for money until after six
months after the date that an independent administration was
created and the order appointing the executor was entered by the
probate court.
Sec. 403.004. REQUIRING HEIRS TO GIVE BOND. When an
independent administration is created and the order appointing an
independent executor is entered by the probate court, any person
having a debt against such estate may, by written complaint filed in
the probate court in which such order was entered, cause all
distributees of the estate, heirs at law, and other persons
entitled to any portion of such estate under the will, if any, to be
cited by personal service to appear before such probate court and
execute a bond for an amount equal to the amount of the creditor's
claim or the full value of such estate, as shown by the inventory
and list of claims, whichever is the smaller, such bond to be
payable to the judge, and the judge's successors, and to be approved
by the judge, and conditioned that all obligors shall pay all debts
that shall be established against such estate in the manner
provided by law. On the return of the citation served, unless such
person so entitled to any portion of the estate, or some of them, or
some other person for them, shall execute such bond to the
satisfaction of the probate court, such estate shall be
administered and settled under the direction of the probate court
as other estates are required to be settled. If the bond is
executed and approved, the independent administration shall
proceed. Creditors of the estate may sue on such bond, and shall be
entitled to judgment on the bond for the amount of their debt, or
they may have their action against those in possession of the
estate.
CHAPTER 404. ACCOUNTINGS, SUCCESSORS, AND OTHER REMEDIES
Sec. 404.001. ACCOUNTING. (a) Interested Person May
Demand Accounting. At any time after the expiration of 15 months
after the date that an independent administration was created and
the order appointing an independent executor was entered by the
probate court, any person interested in the estate may demand an
accounting from the independent executor. The independent executor
shall furnish to the person or persons making the demand an exhibit
in writing, sworn and subscribed by the independent executor,
setting forth in detail:
(1) the property belonging to the estate that has come
into the executor's possession as executor;
(2) the disposition that has been made of such
property;
(3) the debts that have been paid;
(4) the debts and expenses, if any, still owing by the
estate;
(5) the property of the estate, if any, still
remaining in the executor's possession;
(6) such other facts as may be necessary to a full and
definite understanding of the exact condition of the estate; and
(7) such facts, if any, that show why the
administration should not be closed and the estate distributed.
(a-1) Copy of Exhibit or Accounting. Any other interested
person shall, on demand, be entitled to a copy of any exhibit or
accounting that has been made by an independent executor in
compliance with this section.
(b) Enforcement of Demand. Should the independent executor
not comply with a demand for an accounting authorized by this
section within 60 days after receipt of the demand, the person
making the demand may compel compliance by an action in the probate
court. After a hearing, the court shall enter an order requiring the
accounting to be made at such time as it considers proper under the
circumstances.
(c) Subsequent Demands. After an initial accounting has
been given by an independent executor, any person interested in an
estate may demand subsequent periodic accountings at intervals of
not less than 12 months, and such subsequent demands may be enforced
in the same manner as an initial demand.
(d) Remedies Cumulative. The right to an accounting
accorded by this section is cumulative of any other remedies which
persons interested in an estate may have against the independent
executor of the estate.
Sec. 404.002. REQUIRING INDEPENDENT EXECUTOR TO GIVE BOND.
When it has been provided by will, regularly probated, that an
independent executor appointed by such will shall not be required
to give bond for the management of the estate devised by such will,
or the independent executor is not required to give bond because
bond has been waived by court order as authorized under Section
401.005, then such independent executor may be required to give
bond, on proper proceedings had for that purpose as in the case of
personal representatives in a supervised administration, if it be
made to appear at any time that such independent executor is
mismanaging the property, or has betrayed or is about to betray the
independent executor's trust, or has in some other way become
disqualified.
Sec. 404.003. REMOVAL OF INDEPENDENT EXECUTOR. (a) The
probate court, on its own motion or on motion of any interested
person, after the independent executor has been cited by personal
service to answer at a time and place fixed in the notice, may
remove an independent executor when:
(1) the independent executor fails to return within 90
days after qualification, unless such time is extended by order of
the court, an inventory of the property of the estate and list of
claims that have come to the independent executor's knowledge;
(2) sufficient grounds appear to support belief that
the independent executor has misapplied or embezzled, or that the
independent executor is about to misapply or embezzle, all or any
part of the property committed to the independent executor's care;
(3) the independent executor fails to make an
accounting which is required by law to be made;
(4) the independent executor fails to timely file the
affidavit or certificate required by Section 308.004;
(5) the independent executor is proved to have been
guilty of gross misconduct or gross mismanagement in the
performance of the independent executor's duties; or
(6) the independent executor becomes an incapacitated
person, or is sentenced to the penitentiary, or from any other cause
becomes legally incapacitated from properly performing the
independent executor's fiduciary duties.
(b) The order of removal shall state the cause of removal
and shall direct by order the disposition of the assets remaining in
the name or under the control of the removed executor. The order of
removal shall require that letters issued to the removed executor
shall be surrendered and that all letters shall be canceled of
record. If an independent executor is removed by the court under
this section, the court may, on application, appoint a successor
independent executor as provided by Section 404.005.
(c) An independent executor who defends an action for the
independent executor's removal in good faith, whether successful or
not, shall be allowed out of the estate the independent executor's
necessary expenses and disbursements, including reasonable
attorney's fees, in the removal proceedings.
(d) Costs and expenses incurred by the party seeking removal
that are incident to removal of an independent executor appointed
without bond, including reasonable attorney's fees and expenses,
may be paid out of the estate.
Sec. 404.004. POWERS OF AN ADMINISTRATOR WHO SUCCEEDS AN
INDEPENDENT EXECUTOR. (a) Grant of Powers by Court. Whenever a
person has died, or shall die, testate, owning property in this
state, and such person's will has been or shall be admitted to
probate by the court, and such probated will names an independent
executor or executors, or trustees acting in the capacity of
independent executors, to execute the terms and provisions of said
will, and such will grants to such independent executor, or
executors, or trustees acting in the capacity of independent
executors, the power to raise or borrow money and to mortgage, and
such independent executor, or executors, or trustees, have died or
shall die, resign, fail to qualify, or be removed from office,
leaving unexecuted parts or portions of the will of the testator,
and an administrator with the will annexed is appointed by the
probate court, and an administrator's bond is filed and approved by
the court, then in all such cases, the court may, in addition to the
powers conferred on such administrator under other provisions of
the laws of this state, authorize, direct, and empower such
administrator to do and perform the acts and deeds, clothed with the
rights, powers, authorities, and privileges, and subject to the
limitations, set forth in the subsequent provisions of this
section.
(b) Power to Borrow Money and Mortgage or Pledge Property.
The court, on application, citation, and hearing, may, by its
order, authorize, direct, and empower such administrator to raise
or borrow such sums of money and incur such obligations and debts as
the court shall, in its said order, direct, and to renew and extend
same from time to time, as the court, on application and order,
shall provide; and, if authorized by the court's order, to secure
such loans, obligations, and debts, by pledge or mortgage on
property or assets of the estate, real, personal, or mixed, on such
terms and conditions, and for such duration of time, as the court
shall consider to be in the best interests of the estate, and by its
order shall prescribe; and all such loans, obligations, debts,
pledges, and mortgages shall be valid and enforceable against the
estate and against such administrator in the administrator's
official capacity.
(c) Powers Limited to Those Granted by the Will. The court
may order and authorize such administrator to have and exercise the
powers and privileges set forth in Subsection (a) or (b) only to the
extent that same are granted to or possessed by the independent
executor, or executors, or trustees acting in the capacity of
independent executors, under the terms of the probated will of such
deceased person, and then only in such cases as it appears, at the
hearing of the application, that at the time of the appointment of
such administrator, there are outstanding and unpaid obligations
and debts of the estate, or of the independent executor, or
executors, or trustees, chargeable against the estate, or unpaid
expenses of administration, or when the court appointing such
administrator orders the business of such estate to be carried on
and it becomes necessary, from time to time, under orders of the
court, for such administrator to borrow money and incur obligations
and indebtedness in order to protect and preserve the estate.
(d) Powers Other Than Those Relating to Borrowing Money and
Mortgaging or Pledging Property. The court, in addition, may, on
application, citation, and hearing, order, authorize, and empower
such administrator to assume, exercise, and discharge, under the
orders and directions of said court, made from time to time, all or
such part of the rights, powers, and authorities vested in and
delegated to, or possessed by, the independent executor, or
executors, or trustees acting in the capacity of independent
executors, under the terms of the will of such deceased person, as
the court finds to be in the best interests of the estate and shall,
from time to time, order and direct.
(e) Application for Grant of Powers. The granting to such
administrator by the court of some, or all, of the powers and
authorities set forth in this section shall be on application filed
by such administrator with the county clerk, setting forth such
facts as, in the judgment of the administrator, require the
granting of the power or authority requested.
(f) Citation. On the filing of such application, the clerk
shall issue citation to all persons interested in the estate,
stating the nature of the application, and requiring such persons
to appear on the return day named in such citation and show cause
why such application should not be granted, should they choose to do
so. Such citation shall be served by posting.
(g) Hearing and Order. The court shall hear such
application and evidence on the application, on or after the return
day named in the citation, and, if satisfied a necessity exists and
that it would be in the best interests of the estate to grant said
application in whole or in part, the court shall so order;
otherwise, the court shall refuse said application.
Sec. 404.005. COURT-APPOINTED SUCCESSOR INDEPENDENT
EXECUTOR. (a) If the will of a person who dies testate names an
independent executor who, having qualified, fails for any reason to
continue to serve, or is removed for cause by the court, and the
will does not name a successor independent executor or if each
successor executor named in the will fails for any reason to qualify
as executor or indicates by affidavit filed with the application
for an order continuing independent administration the successor
executor's inability or unwillingness to serve as successor
independent executor, all of the distributees of the decedent as of
the filing of the application for an order continuing independent
administration may apply to the probate court for the appointment
of a qualified person, firm, or corporation to serve as successor
independent executor. If the probate court finds that continued
administration of the estate is necessary, the probate court shall
enter an order continuing independent administration and
appointing the person, firm, or corporation designated in the
application as successor independent executor, unless the probate
court finds that it would not be in the best interest of the estate
to do so. Such successor shall serve with all of the powers and
privileges granted to the successor's predecessor independent
executor.
(b) If a distributee described in this section is an
incapacitated person, the guardian of the person of the distributee
may sign the application on behalf of the distributee. If the
probate court finds that either the continuing of independent
administration or the appointment of the person, firm, or
corporation designated in the application as successor independent
executor would not be in the best interest of the incapacitated
person, then, notwithstanding Subsection (a), the probate court may
not enter an order continuing independent administration of the
estate. If the distributee is an incapacitated person and has no
guardian of the person, the court may appoint a guardian ad litem to
make application on behalf of the incapacitated person if the
probate court considers such an appointment necessary to protect
the interest of such distributee.
(c) If a trust is created in the decedent's will, the person
or class of persons first eligible to receive the income from the
trust, determined as if the trust were to be in existence on the
date of the filing of the application for an order continuing
independent administration, shall, for the purposes of this
section, be considered to be the distributee or distributees on
behalf of such trust, and any other trust or trusts coming into
existence on the termination of such trust, and are authorized to
apply for an order continuing independent administration on behalf
of the trust without the consent or agreement of the trustee or any
other beneficiary of the trust, or the trustee or any beneficiary of
any other trust which may come into existence on the termination of
such trust.
(d) If a life estate is created either in the decedent's
will or by law, and if a life tenant is living at the time of the
filing of the application for an order continuing independent
administration, then the life tenant or life tenants, determined as
if the life estate were to commence on the date of the filing of the
application for an order continuing independent administration,
shall, for the purposes of this section, be considered to be the
distributee or distributees on behalf of the entire estate created,
and are authorized to apply for an order continuing independent
administration on behalf of the estate without the consent or
approval of any remainderman.
(e) If a decedent's will contains a provision that a
distributee must survive the decedent by a prescribed period of
time in order to take under the decedent's will, for the purposes of
determining who shall be the distributee under this section, it
shall be presumed that the distributees living at the time of the
filing of the application for an order continuing independent
administration of the decedent's estate survived the decedent for
the prescribed period.
(f) In the case of all decedents, for the purposes of
determining who shall be the distributees under this section, it
shall be presumed that no distributee living at the time the
application for an order continuing independent administration of
the decedent's estate is filed shall subsequently disclaim any
portion of such distributee's interest in the decedent's estate.
(g) If a distributee of a decedent's estate should die, and
if by virtue of such distributee's death such distributee's share of
the decedent's estate shall become payable to such distributee's
estate, then the deceased distributee's personal representative
may sign the application for an order continuing independent
administration of the decedent's estate under this section.
(h) If a successor independent executor is appointed under
this section, then, unless the probate court shall waive bond on
application for waiver, the successor independent executor shall be
required to enter into bond payable to and to be approved by the
judge and the judge's successors in a sum that is found by the judge
to be adequate under all circumstances, or a bond with one surety in
an amount that is found by the judge to be adequate under all
circumstances, if the surety is an authorized corporate surety.
(i) Absent proof of fraud or collusion on the part of a
judge, the judge may not be held civilly liable for the commission
of misdeeds or the omission of any required act of any person, firm,
or corporation designated as a successor independent executor under
this section. Section 351.354 does not apply to an appointment of a
successor independent executor under this section.
CHAPTER 405. CLOSING AND DISTRIBUTIONS
Sec. 405.001. ACCOUNTING AND DISTRIBUTION. (a) In
addition to or in lieu of the right to an accounting provided by
Section 404.001, at any time after the expiration of two years after
the date that an independent administration was created and the
order appointing an independent executor was entered, a person
interested in the estate may petition the court for an accounting
and distribution. The court may order an accounting to be made with
the court by the independent executor at such time as the court
considers proper. The accounting shall include the information that
the court considers necessary to determine whether any part of the
estate should be distributed.
(b) On receipt of the accounting and, after notice to the
independent executor and a hearing, unless the court finds a
continued necessity for administration of the estate, the court
shall order its distribution by the independent executor to the
distributees entitled to the property. If the court finds there is
a continued necessity for administration of the estate, the court
shall order the distribution of any portion of the estate that the
court finds should not be subject to further administration by the
independent executor. If any portion of the estate that is ordered
to be distributed is incapable of distribution without prior
partition or sale, the court shall order partition and
distribution, or sale, in the manner provided for the partition and
distribution of property incapable of division in supervised
estates.
(c) If all the property in the estate is ordered distributed
by the court and the estate is fully administered, the court may
also order the independent executor to file a final account with the
court and may enter an order closing the administration and
terminating the power of the independent executor to act as
executor.
Sec. 405.002. RECEIPTS AND RELEASES FOR DISTRIBUTIONS BY
INDEPENDENT EXECUTOR. (a) An independent executor may not be
required to deliver tangible or intangible personal property to a
distributee unless the independent executor shall receive, at or
before the time of delivery of the property, a signed receipt or
other proof of delivery of the property to the distributee.
(b) An independent executor may not require a waiver or
release from the distributee as a condition of delivery of property
to a distributee.
Sec. 405.003. JUDICIAL DISCHARGE OF INDEPENDENT EXECUTOR.
(a) After an estate has been administered and if there is no
further need for an independent administration of the estate, the
independent executor of the estate may file an action for
declaratory judgment under Chapter 37, Civil Practice and Remedies
Code, seeking to discharge the independent executor from any
liability involving matters relating to the past administration of
the estate that have been fully and fairly disclosed.
(b) On the filing of an action under this section, each
beneficiary of the estate shall be personally served with citation,
except for a beneficiary who has waived the issuance and service of
citation.
(c) In a proceeding under this section, the court may
require the independent executor to file a final account that
includes any information the court considers necessary to
adjudicate the independent executor's request for a discharge of
liability. The court may audit, settle, or approve a final account
filed under this subsection.
(d) On or before filing an action under this section, the
independent executor must distribute to the beneficiaries of the
estate any of the remaining assets or property of the estate that
remains in the independent executor's possession after all of the
estate's debts have been paid, except for a reasonable reserve of
assets that the independent executor may retain in a fiduciary
capacity pending court approval of the final account. The court may
review the amount of assets on reserve and may order the independent
executor to make further distributions under this section.
(e) Except as ordered by the court, the independent executor
is entitled to pay from the estate legal fees, expenses, or other
costs incurred in relation to a proceeding for judicial discharge
filed under this section. The independent executor shall be
personally liable to refund any amount of such fees, expenses, or
other costs not approved by the court as a proper charge against the
estate.
Sec. 405.004. CLOSING INDEPENDENT ADMINISTRATION BY
CLOSING REPORT OR NOTICE OF CLOSING ESTATE. When all of the debts
known to exist against the estate have been paid, or when they have
been paid so far as the assets in the independent executor's
possession will permit, when there is no pending litigation, and
when the independent executor has distributed to the distributees
entitled to the estate all assets of the estate, if any, remaining
after payment of debts, the independent executor may file with the
court a closing report or a notice of closing of the estate.
(a) Closing Report. An independent executor may file a
closing report verified by affidavit that:
(1) shows:
(A) the property of the estate that came into the
independent executor's possession;
(B) the debts that have been paid;
(C) the debts, if any, still owing by the estate;
(D) the property of the estate, if any, remaining
on hand after payment of debts; and
(E) the names and addresses of the distributees
to whom the property of the estate, if any, remaining on hand after
payment of debts has been distributed; and
(2) includes signed receipts or other proof of
delivery of property to the distributees named in the closing
report if the closing report reflects that there was property
remaining on hand after payment of debts.
(b) Notice of Closing Estate. (1) An independent executor
is not required to but may file a notice of closing estate verified
by affidavit that states:
(A) that all debts known to exist against the
estate have been paid or that the debts have been paid so far as the
assets in the possession of the independent executor will permit;
(B) that all remaining assets of the estate, if
any, have been distributed; and
(C) the names and addresses of the distributees
to whom the property of the estate, if any, remaining on hand after
payment of debts has been distributed.
(2) Before filing the notice, the independent executor
shall provide all distributees of the estate with a copy of the
notice of closing estate. The notice of closing estate filed by the
independent executor shall include signed receipts or other proof
that all distributees have received a copy of the notice of closing
estate.
(c) Effect of Filing Closing Report or Notice of Closing
Estate. (1) The independent administration of an estate shall be
considered closed 30 days after the filing of a closing report or
notice of closing estate unless an interested person files an
objection within the 30-day period. If an interested person files
an objection, the independent administration of the estate shall be
closed when the objection has been disposed of or the court signs an
order closing the estate.
(2) The closing of an independent administration by
filing of a closing report or notice of closing estate terminates
the power and authority of the independent executor, but does not
relieve the independent executor from liability for any
mismanagement of the estate or from liability for any false
statements contained in the report or notice.
(3) When a closing report or notice of closing estate
has been filed, persons dealing with properties of the estate, or
with claims against the estate, shall deal directly with the
distributees of the estate; and the acts of such distributees with
respect to such properties or claims shall in all ways be valid and
binding as regards the persons with whom they deal, notwithstanding
any false statements made by the independent executor in such
report or notice.
(4) If the independent executor is required to give
bond, the independent executor's filing of the closing report and
proof of delivery, if required, automatically releases the sureties
on the bond from all liability for the future acts of the principal.
The filing of a notice of closing estate does not release the
sureties on the bond of an independent executor.
(5) An independent executor's closing report or notice
of closing estate shall constitute sufficient legal authority to
all persons owing any money, having custody of any property, or
acting as registrar or transfer agent or trustee of any evidence of
interest, indebtedness, property, or right that belongs to the
estate, for payment or transfer without additional administration
to the distributees described in the will as entitled to receive the
particular asset or who as heirs at law are entitled to receive the
asset. The distributees described in the will as entitled to
receive the particular asset or the heirs at law entitled to receive
the asset may enforce their right to the payment or transfer by
suit.
Sec. 405.005. PARTITION AND DISTRIBUTION OR SALE OF
PROPERTY INCAPABLE OF DIVISION. If the will does not distribute the
entire estate of the testator or provide a means for partition of
the estate, or if no will was probated, the independent executor
may, but may not be required to, petition the probate court for
either a partition and distribution of the estate or an order of
sale of any portion of the estate alleged by the independent
executor and found by the court to be incapable of a fair and equal
partition and distribution, or both. The estate or portion of the
estate shall either be partitioned and distributed or sold, or
both, in the manner provided for the partition and distribution of
property and the sale of property incapable of division in
supervised estates.
Sec. 405.006. CLOSING INDEPENDENT ADMINISTRATION ON
APPLICATION BY DISTRIBUTEE. (a) At any time after an estate has
been fully administered and there is no further need for an
independent administration of such estate, any distributee may file
an application to close the administration; and, after citation on
the independent executor, and on hearing, the court may enter an
order:
(1) requiring the independent executor to file a
closing report meeting the requirements of Section 405.004;
(2) closing the administration;
(3) terminating the power of the independent executor
to act as such; and
(4) releasing the sureties on any bond the independent
executor was required to give from all liability for the future acts
of the principal.
(b) The order of the court closing the independent
administration shall constitute sufficient legal authority to all
persons owing any money, having custody of any property, or acting
as registrar or transfer agent or trustee of any evidence of
interest, indebtedness, property, or right that belongs to the
estate, for payment or transfer without additional administration
to the distributees described in the will as entitled to receive the
particular asset or who as heirs at law are entitled to receive the
asset. The distributees described in the will as entitled to
receive the particular asset or the heirs at law entitled to receive
the asset may enforce their right to the payment or transfer by
suit.
Sec. 405.007. ISSUANCE OF LETTERS. At any time before the
authority of an independent executor has been terminated in the
manner set forth in this subtitle, the clerk shall issue such number
of letters testamentary as the independent executor shall request.
Sec. 405.008. RIGHTS AND REMEDIES CUMULATIVE. The rights
and remedies conferred by this chapter are cumulative of other
rights and remedies to which a person interested in the estate may
be entitled under law.
Sec. 405.009. CLOSING PROCEDURES NOT REQUIRED. An
independent executor is not required to close the independent
administration of an estate under Section 405.003 or 405.004.
SECTION 2.02. Chapter VI-1, Texas Probate Code, as added by
Article 1 of this Act, is repealed.
SECTION 2.03. (a) Except as provided by Subsection (b) of
this section, this article takes effect January 1, 2014.
(b) The changes in law made by this article take effect only
if H.B. No. 2502 or S.B. No. 2071, Acts of the 81st Legislature,
Regular Session, 2009, are enacted and become law. If neither bill
becomes law, this article has no effect.
ARTICLE 3. EFFECTIVE DATE
SECTION 3.01. Except as otherwise provided by this Act,
this Act takes effect September 1, 2009.
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