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Z¸ (#¸ (##à17݃m›‚åÝŒˆÐ °*&& ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýviii.à ¸ àApplication€and€Citationà‚#`"`"I(#.àà1¸ (#¸ (##à17݃m›‚)ÝŒˆÐ ª+ú&' ÐŒÝ  ÝÝ‚l!ùÿÝÝ  ÝÝ‚l!ùÝà0  àà0` (#(#àà  àÝ  Ýc.à ` àTrustsà‚#`"`"I(#.0 0 ` (#` (##à18݃l!ù*ÝŒˆÐ ¤,ô'( ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚çÝà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýi.à ¸ àTrust€Accountingsà‚#`"`"I(#.*¸ (#¸ (##à18݃m›‚çÝŒˆÐ ž-î() ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚ÞÝà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýii.à ¸ àTrustee€Removalà‚#`"`"I(#.¸¸(¸ (#¸ (##à18݃m›‚ÞùÝŒˆÐ ° ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚ÔÝà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýiii.à ¸ àIncome/Principal€Adjustments€in€Charitable€Trustsà‚#`"`"I(#.zzJ¸ (#¸ (##à18݃m›‚ÔïÝŒˆÐ ªú ÐŒÝ  ÝÝ‚l!ùÿÝÝ  ÝÝ‚l!ùí Ýà0  àà0` (#(#àà  àÝ  Ýd.à ` àOtherà‚#`"`"I(#.  ` (#` (##à18݃l!ùí !ÝŒˆÐ ¤ô ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚Ä!Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýi.à ¸ àCreditor€Protection€for€Section€529€Plansà‚#`"`"I(#.B¸ (#¸ (##à19݃m›‚Ä!ß!ÝŒˆÐ žî ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚Ó"Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýii.à ¸ àPowers€of€Appointmentà‚#`"`"I(#.ÅÅ.¸ (#¸ (##à19݃m›‚Ó"î"ÝŒˆÐ ˜è ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚Ï#Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýiii.à ¸ àNotice€Required€in€Recorded€Real€Estate€Documentsà‚#`"`"I(#.~~J¸ (#¸ (##à19݃m›‚Ï#ê#ÝŒˆÐ ’ â ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚è$Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýiv.à0¸ ¸ (#¸ (#àPartners€Owe€Duties€to€Transferees€of€Deceased€Partnersà‚#`"`"I(#.ßßP¸ (#¸ (##à20݃m›‚è$%ÝŒˆÐ Œ Ü ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚&Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýv.à ¸ àGestational€Agreementsà‚#`"`"I(#.»»/¸ (#¸ (##à20݃m›‚&)&ÝŒˆÐ † Ö ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚ 'Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ývi.à ¸ àMarital€Propertyà‚#`"`"I(#.ŸŸ)¸ (#¸ (##à21݃m›‚ '%'ÝŒˆÐ € Ð ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚(Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ývii.à ¸ àAccounts€at€Financial€Institutionsà‚#`"`"I(#.aa;¸ (#¸ (##à21݃m›‚((ÝŒˆÐ z Ê  ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚ )Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýviii.à ¸ àð ðProbate€Mastersðð€Are€Now€ð ðAssociate€Judgesððà‚#`"`"I(#.))E¸ (#¸ (##à22݃m›‚ )&)ÝŒˆÐ tÄ  ÐŒÝ  ÝÝ‚m›‚ÿÝÝ  ÝÝ‚m›‚,*Ýà0  àà0` (#(#àà0¸ ` (#` (#àà ` àÝ  Ýix.à ¸ àDirectives€to€Physicians€and€Family€or€Surrogatesà‚#`"`"I(#.UUJ¸ (#¸ (##à22݃m›‚,*G*ÝŒˆÐ n¾  ÐŒÝ  ÝÝ‚kVmÿÝÌÝ  ÝÝ‚kVmD+Ýà0  àà ° àÝ  Ý3.à  àThings€That€Could€Have€Been,€But€Werenððtà‚#`"`"I(#.7(#(##à22݃kVmD+`+ÝŒˆÐ b²  ÐŒÝ  ÝÓ þÓÌÌÓ  ÓðOððOððOðÐ P  ÐÌÓ  ÓÐ  D” ÐØØÖ€oÿÿÖÑ  ÑÓ  Óà@@ï ï ìàò òÔ‡°€/°XX2¥Ô2003€Legislative€Updateó óÔ#†X2¥X°°€/ã,#ÔÐ ° Ðò òÔ‡¼èô»XX2¥ÔBy€Glenn€M.€Karischó óÔ#†X2¥X»¼èôW-#ÔÐ Ï ÐÓÂ,ÓÌà  àThe€Legislature€has€come€and€gone,€and€the€damage€is€done.€€As€of€July€30,€2003,€theÐ ™é ÐLegislators€have€come€back€for€two€special€sessions,€but€nothing€seems€likely€to€pass€that€would€affectÐ “ ã Ðprobate€and€trust€law.€€Hereððs€the€butcherððs€bill€from€the€regular€session€of€the€78òòthóó€Texas€Legislature:Ð  Ý ÐÌà  àððà0 ` à58€ð!ð€count€ððem,€58€ð!ð€sections€of€the€Probate€Code€added,€amended€or€repealed.Ð Ñ` (#` (# ÐÌà  àððà0 ` àEnactment€of€two€major€uniform€acts€affecting€trusts.ÐuÅ ` (#` (# ÐÌà0  àððà ` àSeveral€other€changes,€some€big€and€some€small.Ði¹ (#(# ÐÌà  àððà0 ` àNo€changes€on€franchise€tax,€state€inheritance€tax,€durable€powers€of€attorney€or€theÐ ]­  Ðrule€against€perpetuities.ÐW§` (#` (# ÐÌà  àThis€paper€summarizes€the€changes€made€by€the€78òòthóó€Texas€Legislature€in€2003,€first€byÐ K› Ðfocusing€on€the€significant€changes€and€then€on€the€other€changes€affecting€probate,€guardianship€andÐ E• Ðtrust€law€in€Texas.€€It€also€offers€"practice€pointers"€ð!ð€tips€for€lawyers€for€adapting€to€these€changes.Ð ? ÐÓÓÌò òÔ  ÔÔ2 # ÔÚ  Ú1Ú  Ú.Ô3  Ôà0  àSignificant€ChangesÔ Ý 3Ôó óÐ3ƒ(#(# ÐÌà  àThese€legislative€developments€are€worthy€of€special€attention:Ð 'w ÐÌà  àò òÔ  ÔÔ2 # ÔÚ  ÚaÚ  Ú.Ô3  Ôà ` àThe€Two€UPIAsÔ Ý 4Ôó óÐ k ÐÌà  àThe€Texas€Legislature€has€enacted€two€uniform€trust€acts€in€2003€ð!ð€the€Uniform€PrudentÐ _ ÐInvestor€Act€of€1994€(HB€2240€ð!ð€new€Chapter€117€of€the€Texas€Trust€Code)€and€the€UniformÐ  Y ÐPrincipal€and€Income€Act€of€1997€(HB€2241€ð!ð€new€Chapter€116€of€the€Texas€Trust€Code).€€TexasÐ !S Ðlagged€behind€the€majority€of€states€in€enacting€these€acts.€€Roughly€40€states€have€already€adopted€theÐ ý!M ÐUniform€Prudent€Investor€Act,€while€roughly€30€have€enacted€part€or€all€of€the€Uniform€Principal€andÐ ÷"G ÐIncome€Act.€€These€bills€will€bring€significant€changes€to€the€default€rules€governing€how€trusts€areÐ ñ#A Ðadministered€and€accounted€for€in€Texas.Ð ë$;  ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiÚ  Ú.Ô3  Ôà ¸ àThe€Uniform€Prudent€Investor€ActÔ Ý Ø7Ôó óÐ ß&/"" ÐÌà  àThe€Uniform€Prudent€Investor€Act€(HB€2240€ð!ð€new€Chapter€117€of€the€Texas€Trust€Code)Ð Ó(#$$ Ðâ âchanges€the€default€rules€regarding€investment€of€trusts.€€It€replaces€Texasððs€modified€ð ðprudent€manððÐ Í)%% Ðinvestment€standard€found€in€Texas€Trust€Code€ðð113.056(a)׃×Ý ƒ_#ÃÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×€with€the€ð ðprudent€investorðð€rule€based€onÐ ° Ðâ âthe€American€Law€Instituteððs€Restatement€(Third)€of€Trusts:€Prudent€Investor€Rule€(1992).€€The€newÐ ªú Ðrule€requires€the€trustee€to€give€greater€attention€to€all€of€the€circumstances€surrounding€the€trust.€€InÐ ¤ô Ðmany€cases€it€will€encourage,€if€not€mandate,€investing€the€trust€for€the€best€total€return€regardless€ofÐ žî Ðwhether€the€return€is€in€the€form€of€principal€or€income.Ð ˜è ÐÌà  àUnder€the€new€Uniform€Prudent€Investor€Act,€trustees€will€have€an€affirmative€duty€to€diversifyÐ Œ Ü Ðinvestments€(new€Texas€Trust€Code€Section€117.005)€and€an€affirmative€duty€to€review€the€trust€assetsÐ † Ö Ðand€to€make€and€implement€decisions€concerning€the€retention€and€disposition€of€assets€in€order€toÐ € Ð Ðbring€them€in€compliance€with€the€prudent€investor€rule€(new€Texas€Trust€Code€Section€117.006).€Ð z Ê  ÐGone€is€the€old€Texas€provision€permitting€retention€of€trust€assets€held€at€the€inception€of€the€trustÐ tÄ  Ðwithout€liability€for€diversification€(old€Texas€Trust€Code€ðð113.003).Ð n¾  ÐÌà  àThe€fiduciary€duties€of€loyalty€and€impartiality,€which€previously€were€common€law€duties€inÐ b²  ÐTexas,€now€are€codified€in€new€Texas€Trust€Code€Sections€117.007€and€117.008.Ð \¬  ÐÌà  àThe€Texas€version€of€the€Uniform€Prudent€Investor€Act€follows€the€uniform€act€very€closely.€Ð P  ÐThere€is€one€major€departure.€€The€Texas€provision€permitting€trustees€to€delegate€the€investmentÐ Jš Ðfunction€and€avoid€liability€for€the€actions€of€the€agent€(new€Texas€Trust€Code€ðð117.011)€is€stricter€thanÐ D” Ðthe€uniform€act.€€In€addition€to€the€requirements€imposed€by€the€uniform€act,€under€the€Texas€provisionÐ >Ž Ða€trustee€does€not€avoid€liability€for€the€actions€of€its€agent€if€(1)€the€agent€is€an€affiliate€of€the€trustee,Ð 8ˆ Ð(2)€the€delegation€agreement€requires€arbitration€or€(3)€the€delegation€agreement€shortens€the€statute€ofÐ 2‚ Ðlimitation.€€Still,€the€new€Texas€delegation€standard€should€be€easier€for€trustees€to€meet€than€the€formerÐ ,| ÐTexas€delegation€statute€(Texas€Trust€Code€ðð113.060),€which€was€repealed.Ð &v ÐÌà  àThe€Uniform€Prudent€Investor€Act€imposes€default€rules.€€Its€provisions€may€be€overriden€byÐ j Ðprovisions€in€the€trust€instrument.Ð d ÐÌà  àThe€Uniform€Prudent€Investor€Act€takes€effect€January€1,€2004,€and€applies€to€new€andÐ  X Ðexisting€trusts.€€With€respect€to€existing€trusts,€actions€taken€by€the€trustee€on€or€after€January€1,€2004,Ð !R Ðwill€be€judged€by€the€new€standard.Ð ü!L ÐÔ_Ôâ âÐ ö"F ÐÔ*’ƒPrQddd Xdd Xdd X°(#°(#’ÔÔ,xdd ÔÔ+  ÔÐ °° €€ Ðâ âò òòòÓ  ÓPractice€Pointersó óóóÐ d ÐÓ  ÓÌ1.à0 l àFor€guidance€on€interpreting€the€Uniform€Prudent€Investor€Act,€see€the€official€comments€ofÐ X Ðthe€National€Conference€of€Commissioners€on€Uniform€State€Laws€and€the€Real€Estate,Ð R ÐProbate€and€Trust€Law€Section€of€the€State€Bar€of€Texas.€€The€full€text€of€the€act€with€theseÐ üL Ðcomments€may€be€downloaded€from€the€Texas€Probate€Web€Site,Ð ö F ÐÔ4‚RÝ lÔÝ‚ÍOÝÔÿÔòòÝ  ÝÔ5  Ôhttp://www.texasprobate.comÔ6‰HÔÝ‚ÍOHƒÝóóÔÿÔÝ  ÝÔ7Ý 0ËHÔ€ð!ð€click€on€ð ð2003"€under€ð ðLegislation.ðð€€A€derivation€table€isÐ ð @ Ðavailable€on€the€same€site.Ðê :lÄ"lÄ" ÐÌ2.à0 l àLawyers€representing€individual€trustees€can€really€earn€their€fees€by€advising€their€clientsÐ Þ .  Ðabout€the€new€delegation€rules.€€Individual€trustees€who€retain€someone€to€manage€theÐ Ø(  Ðinvestments€should€be€made€aware€that€choosing€an€agent€that€does€òònotóó€require€arbitration€orÐ Ò"  Ðshorten€the€statute€of€limitations€may€make€it€possible€for€the€trustee€to€avoid€liability,€whileÐ Ì  Ðselecting€an€agent€who€sticks€an€arbitration€provision€in€the€delegation€agreement€will€meanÐ Æ  Ðthat€the€trustee€stays€on€the€hook€for€the€misdeeds€of€the€agent.ÐÀlÄ"lÄ" ÐÌ3.à0 l àSince€the€act€applies€to€existing€trusts,€consider€writing€existing€trustee€clients€about€the€newÐ ´ Ðact€prior€to€January€1,€2004,€emphasizing€among€other€things€the€increased€duty€to€diversify.ЮþlÄ"lÄ" ÐÌ4.à0 l àIn€appropriate€cases,€consider€opting€out€of€the€new€investment€standard€by€drafting€aÐ ¢ò Ðdifferent€standard€into€the€trust€instrument.Ð(œìlÄ"lÄ"  (ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiÚ  Ú.Ô3  Ôà ¸ àThe€Uniform€Principal€and€Income€ActÔ Ý wNÔó óÐ À ÐÌà  àThe€Uniform€Principal€and€Income€Act€(HB€2241€ð!ð€new€Chapter€116€of€the€Texas€TrustÐ ´ ÐCode)€changes€the€default€rules€a€trustee€uses€to€allocate€receipts€and€disbursements€between€principalÐ ®þ Ðand€income.€€The€most€significant€change€is€in€new€Texas€Trust€Code€ðð116.005,€which€permits€theÐ ¨ø Ðtrustee€to€make€adjustments€between€principal€and€income€in€certain€cases.€€This€power€to€adjust€isÐ ¢ò Ðnecessary€in€income„only€trusts€if€the€trustee€invests€for€total€return€under€the€prudent€investor€rule.€€ForÐ œ ì Ðexample,€if€the€trustee€invests€for€total€return€by€investing€in€growth€stocks,€thereby€achieving€a€20%Ð –!æ Ðreturn€but€with€virtually€no€ð ðtraditionalðð€trust€income,€the€trustee€may€use€Section€116.005€to€make€anÐ "à Ðadjustment€so€that€the€income€beneficiary€receives€a€reasonable€rate€of€return€(say€3%€to€5%).€€TheÐ Š#Ú Ðpower€to€adjust€cannot€be€used€in€some€cases,€including€cases€in€which€the€trustee€also€is€a€beneficiaryÐ „$Ô  Ðof€the€trust.Ð ~%Î ! ÐÌà  àThis€adjustment€power€caused€corporate€trustees€to€flinch€at€the€potential€liability€toÐ r'Â"# Ðbeneficiaries€for€making€these€adjustments.€€New€Texas€Trust€Code€ðð116.006€permits€the€trustee€to€goÐ l(¼#$ Ðto€court€in€some€cases€and€obtain€an€advisory€opinion€that€the€proposed€adjustment€will€not€be€aÐ f)¶$% Ðbreach€of€trust.€€There€are€conditions€placed€on€the€trusteeððs€right€to€bring€this€action,€however.€€Also,Ð `*°%& Ðwhile€the€section€requires€the€trustee€to€advance€attorneyððs€fees€to€beneficiaries€in€connection€with€theÐ Z+ª&' Ðaction,€it€permits€the€court€to€charge€these€fees€to€the€trustee,€to€one€or€more€beneficiaries€(or€their€trustÐ T,¤'( Ðinterests),€or€to€the€trust€at€the€conclusion€of€the€proceeding€as€circumstances€warrant.Ð ° ÐÌà  àSeveral€states€have€adopted€statutes€permitting€existing€trusts€to€be€converted€to€Ô_ÔunitrustsÔ_Ô.€Ð ¤ô ÐTexas€did€òònotóó€adopt€a€Ô_ÔunitrustÔ_Ô€conversion€statute.€€However,€new€Texas€Trust€Code€ðð116.007€permitsÐ žî Ða€Ô_ÔsettlorÔ_Ô€to€define€trust€income€in€terms€of€a€Ô_ÔunitrustÔ_Ô€percentage,€which€will€be€helpful€if€Ô‡&¢%XX2¥ÔProposedÐ ˜è ÐTreasury€Regulation€1.643(b)-1,€66€Fed.€Reg.€10396€(February€15,€2001),Ô#†X2¥X%&¢ÕX#Ô€becomes€final.€€Then€a€maritalÐ ’ â Ðdeduction€trust€could€be€set€up€as€a€Ô_ÔunitrustÔ_Ô€and€meet€the€all„income„to„spouse€requirement.Ð Œ Ü ÐÌà  àIn€most€cases,€the€Texas€version€of€the€Uniform€Principal€and€Income€Act€follows€the€uniformÐ € Ð Ðact,€which€has€a€stated€bias€toward€principal€(Section€116.004(a)(4)€provides,€in€essence,€when€inÐ z Ê  Ðdoubt,€a€receipt€is€principal).€€However,€in€a€few€key€places€the€Texas€statute€differs.€€These€include:Ð tÄ  ÐÌà  àòòò òDeferred€Compensation€Plans€ð!ð€Section€116.172.ó óóó€€Rather€than€adopting€the€uniform€actÐ h¸  Ðrule,€which€would€have€made€90%€of€any€required€payment€from€a€qualified€plan€or€IRA€principal€andÐ b²  Ðonly€10%€income,€the€Texas€statute€provides€that€distributions€of€up€to€4%€of€the€value€of€the€plan€orÐ \¬  ÐIRA€in€any€one€year€is€income€and€any€excess€is€principal.׃g×Ý ƒ_#ÃÝòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×€€The€Real€Estate,€Probate€and€Trust€LawÐ V¦ ÐSection€of€the€State€Bar€of€Texas,€which€pushed€for€this€legislation,€thought€this€was€fairer€to€the€incomeÐ P  Ðbeneficiary€and€more€in€keeping€with€oneððs€expectations.€€The€new€provision€replaces€former€TexasÐ Jš ÐTrust€Code€ðð113.109,€which€was€repealed.Ð D” ÐÌà  àò òòòOil,€Gas€and€Minerals€ð!ð€Section€116.174.ó óóó€€Under€old€Texas€Trust€Code€ðð113.107,€72€ððÐ 8ˆ Ð%€of€royalties€were€income€and€27€ðð€%€were€principal.€€Under€the€uniform€act,€only€10%€would€haveÐ 2‚ Ðbeen€income€while€90%€would€have€been€principal.€€€€€The€Real€Estate,€Probate€and€Trust€Law€SectionÐ ,| Ðof€the€State€Bar€of€Texas€thought€that€this€was€unfair€to€the€income€beneficiary€and€not€in€keeping€withÐ &v Ðoneððs€expectations,€so€the€Texas€version€varies€from€the€uniform€act.€€Under€it,€the€trustee€is€required€toÐ  p Ðallocate€these€receipts€ð ðequitably,ðð€and€allocating€in€accordance€with€the€available€federal€tax€depletionÐ j Ðdeduction€is€presumed€to€be€equitable.€€Also,€for€existing€trusts,€trustees€may€continue€to€apply€the€oldÐ d Ð72€ðð€%€income€rule.Ð ^ ÐÌà  àThe€Uniform€Principal€and€Income€Act€also€impacts€the€allocation€of€receipts€andÐ !R Ðdisbursements€in€estates.€€Some€of€the€subsections€of€Section€378B€of€the€Probate€Code€have€beenÐ ü!L Ðrepealed€or€substantially€changed.Ð ö"F ÐÌà  àThe€Uniform€Principal€and€Income€Act€provides€default€rules€for€allocating€income.€€The€Ô_ÔsettlorÔ_ÔÐ ê$: ! Ðmay€override€these€provisions€by€placing€contrary€provisions€in€the€trust€instrument.Ð ä%4!" ÐÌà  àThis€act€takes€effect€January€1,€2004,€and€applies€to€existing€as€well€as€new€trusts.€€Thus,€theÐ Ø'(#$ Ðtrust€accounting€rules€for€existing€trusts€will€change€January€1,€2004.Ð ° ÐÌÔ*lƒSrTddxdd xPrQ°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ ¤ô¤ô €€ ÐÓ  Óò òòòPractice€Pointersó óóóÐ X ÐÓ  ÓÌ1.à0 l àFor€guidance€on€interpreting€the€Uniform€Principal€and€Income€Act,€see€the€officialÐ üL Ðcomments€of€the€National€Conference€of€Commissioners€on€Uniform€State€Laws€and€theÐ ö F ÐReal€Estate,€Probate€and€Trust€Law€Section€of€the€State€Bar€of€Texas.€€The€full€text€of€theÐ ð @ Ðact€with€these€comments€may€be€downloaded€from€the€Texas€Probate€Web€Site,Ð ê : ÐÔ4‚UÝ lÔÝ‚ÍOÝÔÿÔòòÝ  ÝÔ5  Ôhttp://www.texasprobate.comÔ6…hÔÝ‚ÍO™hƒÝóóÔÿÔÝ  ÝÔ7Ý 0ÇhÔ€ð!ð€click€on€ð ð2003"€under€ð ðLegislation.ðð€€A€derivation€table€andÐ ä 4  Ða€side„by„side€comparison€of€the€old€and€new€allocation€rules€are€available€on€the€same€site.ÐÞ . lÄ"lÄ" ÐÌ2.à0 l àThe€power€to€adjust€in€Section€116.005€is€central€to€the€new€Act.€€It€provides€draftingÐ Ò"  Ðchallenges€(opportunities?).€€Here€are€a€few:ÐÌ lÄ"lÄ" ÐÌà0 l àððà0Ä lÄ"lÄ"àDrafting€to€permit€the€trustee€to€make€principal€distributions€based€on€a€health,Ð À Ðeducation,€maintenance€and€support€standard€eliminates€the€need€for€the€power€toÐ º  Ðadjust€and€will€be€a€better€approach€in€most€cases.Ð´Ä Ä"Ä Ä" ÐÌà0 l àððà0Ä lÄ"lÄ"àIf€an€income„only€standard€is€to€be€used,€consider€drafting€a€non„charitable€Ô_ÔunitrustÔ_Ô.€Ð ¨ø ÐSee€Section€116.007,€but€be€careful€in€marital€deduction€trusts€until€the€proposedÐ ¢ò Ðregulations€are€finalized.МìÄ Ä"Ä Ä" ÐÌà0 l àððà0Ä lÄ"lÄ"àIf€an€income„only€standard€is€to€be€used,€selection€of€the€trustee€is€important,€since€aÐ à Ðtrustee€who€also€is€a€beneficiary€cannot€make€adjustments.€€Consider€an€independentÐ ŠÚ Ðtrustee,€a€co„trustee€who€has€sole€authority€to€make€adjustments,€or€a€trust€protectorÐ „Ô Ðarrangement.Ð~ÎÄ Ä"Ä Ä" ÐÌ3.à0 l àThe€procedure€permitting€a€trustee€to€seek€an€advisory€opinion€about€a€proposed€adjustmentÐ r Ð(Section€116.006)€must€be€carefully€handled€by€all€parties.€€The€trustee€must€make€aÐ l ¼ Ðreasonable€disclosure€to€the€beneficiaries€and€must€have€a€reasonable€belief€that€a€beneficiaryÐ f!¶ Ðwill€object€before€it€can€initiate€the€proceeding.€€Does€the€trustee€ask€the€beneficiary€to€stateÐ `"° Ðwhether€or€not€he€or€she€objects€in€writing?€€If€so,€does€the€trustee€have€to€warn€theÐ Z#ª  Ðbeneficiary€that€objecting€will€trigger€an€expensive€proceeding?€€How€should€a€beneficiaryÐ T$¤! Ðrespond€to€a€request€for€consent€or€objection?€€If€a€proceeding€is€started,€how€can€eachÐ N%ž " Ðparty€best€assure€that€it€will€not€be€saddled€with€all€of€the€costs€and€attorneysðð€fees?ÐH&˜!#lÄ"lÄ" ÐÌ4.à0 l àConsider€altering€the€default€rules€regarding€allocation€of€receipts€between€income€andÐ <(Œ#% Ðprincipal€in€two€cases€ð!ð€retirement€plans€and€oil,€gas€and€mineral€royalties.€€In€both€cases,Ð 6)†$& Ðconsider€allocating€all€such€receipts€to€income€or,€in€the€case€of€royalties,€consider€using€theÐ 0*€%' Ðformer€objective€standard€(72€ðð€%€income/€27€ðð€%€principal)€instead€of€the€new€subjectiveÐ *+z&( Ðstandard€(ð ðequitablyðð).Ð($,t')lÄ"lÄ"  (Їà  àò òÔ  ÔÔ2 # ÔÚ  ÚbÚ  Ú.Ô3  Ôà ` àNew€Rules€for€Guardians€of€the€EstateÔ Ý ËtÔó óÐ ° ÐÌà  àHB€1470€imposes€new,€and€tougher,€rules€on€guardians€of€the€estate.€€These€changes€have€aÐ ¤ô Ðparticularly€tough€bite€at€the€inception€of€guardianships.€€Attorneys€representing€guardians€need€to€studyÐ žî Ðthese€changes€and€advise€clients€appropriately.Ð ˜è ÐÌà  àPreviously,€guardians€had€90€days€(or€such€longer€period€that€may€be€granted€by€the€court)€toÐ Œ Ü Ðfile€an€inventory.€€Under€the€new€law€(Probate€Code€ðð€729),€that€deadline€is€shortened€to€30€days.€Ð † Ö ÐSection€765€also€was€amended€to€require€a€successor€guardian€to€file€an€inventory€within€30€days.€€Ð € Ð ÐÌà  àThe€reason€for€the€deadline€is€a€new€requirement€that€the€guardian€apply€for€approval€of€aÐ tÄ  Ðmonthly€allowance€within€30€days€of€the€granting€of€letters€of€guardianship€(Probate€Code€ðð€776).€€TheÐ n¾  Ðjudges€wanted€the€inventory€filed€before€the€monthly€allowance€application€was€heard.€€In€some€partsÐ h¸  Ðof€the€state,€monthly€allowances€are€common.€€Now€they€will€be€required.Ð b²  ÐÌà  àOne€bright€spot€is€that€the€$5,000€limit€on€after„the„fact€approval€of€unauthorized€(but€justified)Ð V¦ Ðprincipal€distributions€in€Section€776€is€removed.€€However,€to€be€approved,€the€guardian€must€showÐ P  Ðthat€€(1)€the€expenditures€were€made€when€it€was€not€convenient€or€possible€for€the€guardian€to€firstÐ Jš Ðsecure€court€approval,€(2)€€the€proof€is€clear€and€convincing€that€the€expenditures€were€reasonable€andÐ D” Ðproper,€(3)€the€court€would€have€granted€authority€in€advance€to€make€the€expenditures,€and€(4)€theÐ >Ž Ðward€received€the€benefits€of€the€expenditures.Ð 8ˆ ÐÌà  àAnother€new€requirement€is€the€filing€of€an€application€for€approval€of€an€investment€plan€for€theÐ ,| Ðguardianship€within€180€days€of€the€granting€of€letters€(new€Texas€Probate€Code€ðð€855B).€€The€newÐ &v Ðscheme€anticipates€that€the€guardian€will€spend€the€first€six€months€deciding€which€assets€to€keep€andÐ  p Ðwhich€ones€to€sell.€€The€investment€plan€provides€the€guardian€and€the€court€with€a€road€map€of€how€toÐ j Ðinvest€and€manage€the€wardððs€assets.Ð d ÐÌà  àHB€1470€makes€a€general€overhaul€of€the€investment€rules€for€guardians€(see€changes€toÐ  X ÐSections€768,€814,€854,€855,€855A,€855B,€857,€858,€860€and€863).€€In€general,€the€new€rules€adoptÐ !R Ða€ð ðprudent€manðð€standard€for€investment,€rather€than€a€ð ðprudent€investorðð€standard€(see€Section€855).€Ð ü!L ÐThere€are€changes€to€the€rules€governing€loans€of€the€wardððs€funds,€including€a€presumption€that€aÐ ö"F Ðreasonable€rate€of€interest€is€120%€of€the€applicable€federal€rate€(Section€858),€and€real€estateÐ ð#@  Ðinvestments€(Section€860).Ð ê$: ! ÐÌà  àHB€1470€provides€that€most€of€these€new€investment€rules€apply€to€new€guardianships€and€toÐ Þ&."# Ðexisting€guardianships€which€are€ð ðmodified€to€conform€to€the€changes€in€law.ðð€€At€least€one€statutoryÐ Ø'(#$ Ðprobate€court€plans€to€issue€a€blanket€order€modifying€all€existing€guardianships€to€conform€to€theÐ Ò("$% Ðchanges€wrought€by€HB€1470.€€Ð Ì)%& Ðâ âÐ Æ*&' ÐÔ*lƒVrWddxdd xSrT°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ °° €€ Ðâ âÓ  Óò òòòPractice€Pointersóóó óÐ d ÐÓ  ÓÌ1.à0 l àBecause€of€the€new€requirements€30€days€and€180€days€after€letters€of€guardianship€areÐ X Ðgranted,€in€most€cases€the€applicant€for€a€guardianship€will€have€to€be€pretty€far€along€in€theÐ R Ðinventory€process€when€he€or€she€files€the€guardianship€application.€€If€possible,€the€applicantÐ üL Ðshould€file€the€application€for€monthly€allowance€and€approval€of€the€investment€plan€at€theÐ ö F Ðtime€the€guardianship€application€is€filed€and€have€the€inventory€more€or€less€ready€to€goÐ ð @ Ðwhen€the€application€is€filed.€€The€court€will€appreciate€this,€and€the€client€will€appreciate€this.€Ð ê : ÐOtherwise,€the€applicant/guardian€will€be€spending€a€lot€of€time€at€the€attorneyððs€office€in€theÐ ä 4  Ðfirst€14€months€of€a€guardianship€as€one€requirement€after€the€other€is€met.€€Of€course,€inÐ Þ .  Ðcontested€guardianships€and€in€guardianships€where€no€one€really€knows€what€assets€theÐ Ø(  Ðward€owns,€this€will€be€difficult.€€Hopefully€the€courts€will€be€willing€to€extend€the€deadlinesÐ Ò"  Ðin€these€cases.ÐÌ lÄ"lÄ" ÐÌ2.à0 l àThese€guardianship€changes€will€help€get€the€guardian€off€on€the€right€foot,€but€they€addÐ À Ðcomplexity€and€expense€to€a€procedure€which€already€was€cumbersome€and€costly.€€If€everÐ º  Ðthere€was€a€reason€to€use€powers€of€attorney€and€revocable€trusts€to€avoid€guardianships,Ð ´ Ðthe€2003€legislative€changes€are€it.ЮþlÄ"lÄ" ÐÌ3.à0 l àIn€many€respects,€these€new€investment€rules€for€guardians€are€as€significant€to€guardians€asÐ ¢ò Ðthe€Uniform€Prudent€Investor€Act€is€to€trustees.€€The€effective€date€of€the€guardianshipÐ œì Ðchanges€is€September€1,€2003,€so€any€effort€to€educate€guardians€about€the€new€rules€needsÐ –æ Ðto€start€soon.€€Check€to€see€if€your€court€has€issued€an€order€modifying€your€existingÐ à Ðguardianship€to€conform€to€the€new€investment€rules.Ð(ŠÚlÄ"lÄ"  (ÐÌà  àò òÔ  ÔÔ2 # ÔÚ  ÚcÚ  Ú.Ô3  Ôà ` àMedicaid€Estate€Recovery€ð!ð€Donððt€Mess€With€Texas.€€Er,€Never€Mind.Ô Ð²ŒÔó óÐ ®þ ÐÌà  àTexas€has€avoided€implementing€a€Medicaid€estate€recovery€program€for€10€years€(since€it€wasÐ ¢ò Ðrequired€by€the€Omnibus€Budget€Reconciliation€Act€(Ô_ÔOBRAÔ_Ô)€of€1993)€with€no€ill€effects.€€This€meantÐ œ ì Ðthat€a€Texan€owning€a€home€going€into€a€nursing€home€could€receive€Medicaid€benefits€without€theÐ –!æ Ðfamily€losing€the€home€to€pay€back€Medicaid.€€ÓÓUnfortunately,€due€to€greed,€timidity,€stupidity,€mean„Ð "à Ðspiritedness€or€fiscal€responsibility€(take€your€pick),€a€provision€was€added€to€HB€2292€late€in€theÐ Š#Ú Ðsession€which€requires€the€appropriate€state€agency€to€implement€an€estate€recovery€system.€€ThisÐ „$Ô  Ðmeans€that€the€successor€to€the€Department€of€Human€Services€will€be€working€up€the€terms€of€TexasððsÐ ~%Î ! Ðvery€own€estate€recovery€plan€in€the€near€future.Ð x&È!" ÐÌà  àIt€is€not€clear€exactly€how€the€estate€recovery€program€will€be€implemented.€€It€may€be€limitedÐ l(¼#$ Ðto€probate€estates,€meaning€that€living€trust€planning€may€be€an€effective€workaround.€€What€is€clear,Ð f)¶$% Ðthough,€is€that€a€Medicaid€recipientððs€family€can€no€longer€count€on€the€patientððs€house€being€protectedÐ `*°%& Ðfrom€seizure€by€the€state€after€the€patientððs€death.Ð Z+ª&' ÐÐ T,¤'( ÐÔ*lƒXrYddxdd xVrW°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ °° €€ ÐÓ  Óò òòòPractice€Pointeróóó óÐ d ÐÓ  ÓÌElder€law€specialists€will€have€to€spend€a€lot€of€time€evaluating€the€significance€of€this€change€forÐ X Ðclients.€€The€rest€of€us€need€to€place€firmly€in€our€consciousness€that€our€elder€clientsðð€homes€are€notÐ R Ð100%€safe.€€It€may€be€that€drafting€options€will€be€available€to€protect€homes€from€seizure,€but€it€isÐ üL Ðtoo€early€to€tell.€€If€a€client€must€act€now€during€this€time€of€uncertainty,€(1)€consider€referring€theÐ ö F Ðclient€to€an€elder€law€specialist€or€(2)€consider€a€living€trust,€which€may€provide€protection,€althoughÐ ð @ Ðthat€is€not€clear.Ðê :  ÐÌà  àò òÔ  ÔÔ2 # ÔÚ  ÚdÚ  Ú.Ô3  Ôà ` àExculpatory€Clauses€in€TrustsÔ  ΖÔó óÐ ^  ÐÌà  àOn€December€31,€2002,€the€Texas€Supreme€Court€issued€its€opinion€in€òòTexas€CommerceÐ R  ÐBank,€N.€A.€v.€Grizzle,óó€96€S.€W.€3d€240€(Tex.€2002).€The€òòGrizzleóó€case€took€a€very€broad€view€ofÐ üL  ÐSection€113.059€of€the€Texas€Trust€Code€which,€if€taken€to€its€logical€conclusion,€could€mean€that€theÐ öF  ÐÔ_ÔsettlorÔ_Ô€of€a€trust€could€override€all€statutory€and€common€law€trustee€duties,€so€long€as€he€or€she€did€notÐ ð@ Ðattempt€to€relieve€a€òòcorporateóó€trustee€from€the€prohibited€actions€in€Section€113.052€and€113.053.€ForÐ ê: Ðexample,€the€òòGrizzleóó€opinion€leaves€open€the€door€to€a€trustee€being€exculpated€for€actions€taken€inÐ ä4 Ðbad€faith€or€with€reckless€indifference€and€to€flatly€refusing€to€give€any€kind€of€accounting,€if€the€trustÐ Þ. Ðinstrument€backs€him€or€her€up.€Reasonable€minds€differ€about€whether€òòGrizzleóó€can€be€read€to€reachÐ Ø( Ðthis€far,€but€the€Legislature€chose€to€respond€to€òòGrizzleóó€by€amending€Trust€Code€ðð113.059€toÐ Ò" Ðincorporate€the€provisions€of€the€Restatement€(2òòndóó)€of€Trusts,€ðð222,€which€prohibit€the€enforcement€ofÐ Ì Ðan€exculpation€clause€that€would€relieve€a€trustee€of€liability€for€a€breach€of€trust€committed€in€bad€faith,Ð Æ Ðintentionally€or€with€reckless€indifference€to€the€interest€of€the€beneficiary.€€It€also€may€not€relieve€theÐ À Ðtrustee€for€liability€for€any€profit€derived€by€the€trustee€from€a€breach€of€trust€(HB€3503).Ð º  ÐÌà  àAnother€reaction€to€òòGrizzleóó€were€amendments€to€the€statutes€governing€142€Trusts€(TexasÐ ®þ ÐProperty€Code€ðð142.005)€and€867€Trusts€(Texas€Probate€Code€ðð867).€€These€amendments€make€anyÐ ¨ø Ðprovision€in€one€of€these€court„created€trusts€unenforceable€to€the€extent€that€it€limits€the€liability€of€aÐ ¢ò Ðtrustee€beyond€that€imposed€by€the€Texas€Trust€Code,€unless€there€is€a€specific€finding€by€clear€andÐ œ ì Ðconvincing€evidence€that€the€specific€property€of€that€trust€justifies€the€exculpation€provision€(HB€3503).Ð –!æ ÐÌÔ*lƒarbddxdd xXrY°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ Š#ÚŠ#Ú €€ ÐÓ  Óò òòòPractice€Pointersóóó óÐ î#>  ÐÓ  ÓÌ1.à0 l àSince€most€Ô_ÔsettlorsÔ_Ô€donððt€exculpate€trustees€for€bad€faith€actions€or€reckless€indifference,Ð â%2!" Ðmost€exculpation€clauses€will€not€cross€the€line€drawn€by€HB€3503€except€possibly€in€oneÐ Ü&,"# Ðcase:€liability€for€profit€derived€from€breach€of€trust.€€Since€the€new€law€applies€to€existingÐ Ö'&#$ Ðtrusts,€if€you€have€an€existing€trustee€client,€see€if€the€trust€instrument€contains€an€exculpationÐ Ð( $% Ðprovision€which€crosses€the€line€and€warn€the€client€if€it€does.ÐÊ)%&lÄ"lÄ" ÐÌ2.à0 l àOne€consequence€of€HB€3503€is€that€we€now€know€how€far€an€exculpation€provision€canÐ ¾+'( Ðgo.€€Therefore,€in€drafting€situations€where€the€Ô_ÔsettlorÔ_Ô€wishes€to€include€the€broadest€possibleÐ d Ðexculpation€provision,€following€the€statutory€language€should€allow€the€drafter€to€paintÐ ^ Ðprecisely€within€the€lines.€€However,€please,€òòplease,€ò òpleaseó óóó€donððt€stick€exculpationÐ X Ðprovisions€in€the€boilerplate€ð!ð€they€should€only€be€used€in€special,€limited€circumstances.ÐRlÄ"lÄ" ÐÌ3.à0 l àExculpation€clauses€in€existing€142€Trusts€and€867€Trusts€will€become€unenforceable€onÐ ö F ÐSeptember€1,€2003,€unless€the€court€makes€the€new,€specific€finding€that€the€exculpationÐ ð @ Ðprovision€is€justified.€€Notify€your€clients€who€are€trustees€of€existing€142€Trusts€and€867Ð ê : ÐTrusts€of€this.Ðä 4 lÄ"lÄ" ÐÌ4.à0 l àWhen€creating€new€142€Trusts€and€867€Trusts,€consider€whether€or€not€the€specific€factsÐ Ø(  Ðexist€to€justify€an€exculpation€provision.€€If€so,€be€sure€to€seek€and€obtain€the€necessary€courtÐ Ò"  Ðfinding.€€Donððt€just€stick€an€exculpation€provision€in€the€trust.Ð(Ì lÄ"lÄ"  (ÐÌà  àò òÔ  ÔÔ2 # ÔÚ  ÚeÚ  Ú.Ô3  Ôà ` àStatutory€Probate€Court€Jurisdiction€Gets€Even€More€ComplicatedÔ  ©Ôó óÐ ð@ ÐÌà  àThree€bills€passed€affecting€the€power€of€statutory€probate€courts€to€hear€cases.€€HB€1470€andÐ ä4 ÐHB€1473,€which€had€the€support€of€most,€if€not€all,€of€the€statutory€probate€judges,€takes€away€theÐ Þ. Ðpower€of€district€courts€to€hear€any€case€in€which€the€personal€representative€of€an€estate€(or€guardian)Ð Ø( Ðis€a€party€unless€(1)€it€is€a€wrongful€death,€survival€or€personal€injury€action€or€(2)€ð ðin€all€actionsÐ Ò" Ðinvolving€a€personal€representative€of€an€estate€in€which€each€other€party€aligned€with€the€personalÐ Ì Ðrepresentative€is€not€an€interested€person€in€that€estate.ðð׃O×Ý ƒ_#ÃÝòòÚ  Ú3Ú  ÚóóÝ  Ý×  ×€€In€these€cases,€the€jurisdiction€of€the€statutoryÐ Æ Ðprobate€court€and€the€district€court€is€concurrent.€€Thus,€except€for€these€few€cases,€virtually€every€caseÐ À Ðin€which€the€personal€representative€or€guardian€is€a€party€must€be€brought€in€the€statutory€probateÐ º  Ðcourt€even€if€the€case€has€nothing€to€do€with€probate.Ð ´ ÐÌà  àHB€1470€and€HB€1473€also€rewrite€and€reorganize€Sections€5,€5A,€606€and€607.€€In€general,Ð ¨ø Ðthe€reorganization€moves€some€of€the€ð ðjurisdictionalðð€provisions€from€Section€5A€to€Section€5€and€fromÐ ¢ò ÐSection€607€to€Section€606,€leaving€the€ð ðappertaining€and€incident€to€estateðð€language€in€Sections€5AÐ œ ì Ðand€Section€607.€€(HB€4,€discussed€below,€amends€Sections€5A€and€607,€which€makes€thingsÐ –!æ Ðinteresting€[in€other€words,€confusing],€since€HB€4€amended€the€former€statute,€not€the€amendedÐ "à Ðstatute.)Ð Š#Ú ÐÐ „$Ô  ÐÔ_Ôà  àThe€proponents€of€HB€1470€and€HB€1473€get€an€ð ðEðð€for€effort,€but€the€reorganized€statutes€doÐ ° Ðnot€eliminate€all€of€the€potential€construction€issues.€€One€issue€which€jumps€out€is€the€jurisdiction€of€theÐ ªú Ðdistrict€courts€and€the€statutory€probate€courts€over€testamentary€trusts.€€Based€upon€the€changes€madeÐ ¤ô Ðby€HB€1473,€there€are€at€least€these€five€possibilities€for€the€proper€jurisdiction€of€a€proceedingÐ žî Ðconcerning€a€testamentary€trust€(but€not€an€inter€vivos€or€charitable€trust).€€The€case€either:Ð ˜è ÐÌà0  àððà0` (#(#àMust€be€brought€in€the€statutory€probate€court€which€probated€the€will€creating€theÐ Œ Ü Ðtrust,€but€only€if€the€estate€is€still€pending€in€the€court;€òòò òoróóó óІ Ö` (#` (# ÐÌà0  àððà0` (#(#àMust€be€brought€in€the€statutory€probate€court€which€probated€the€will€creating€theÐ z Ê  Ðtrust,€even€if€the€estate€is€no€longer€pending€in€the€court;€òòò òoróóó óÐtÄ ` (#` (# ÐÌà0  àððà0` (#(#àMust€be€brought€in€the€statutory€probate€court€which€has€proper€Trust€Code€venue€(inÐ h¸  Ðother€words,€where€the€trustee€resides€or€in€the€ð ðsitus€of€administrationðð€ð!ð€see€TexasÐ b²  ÐTrust€Code€ðð115.002)€and€not€in€the€district€court€or€in€the€statutory€probate€courtÐ \¬  Ðwhich€probated€the€will€creating€the€trust;€òòò òoró óóóÐV¦` (#` (# ÐÌà0  àððà0` (#(#àMay€always€be€brought€in€the€district€court€and€may€also€be€brought€in€statutoryÐ Jš Ðprobate€court€if€the€trust€is€related€to€an€estate€that€is€pending€in€a€statutory€probateÐ D” Ðcourt€or€if€the€personal€representative€of€an€estate€is€a€party€to€the€proceeding;€òòò òoróóó óÐ>Ž` (#` (# ÐÌà0  àððà0` (#(#àMust€be€brought€in€the€district€court€unless€the€trust€is€related€to€an€estate€that€isÐ 2‚ Ðpending€in€a€statutory€probate€court€or€unless€the€personal€representative€of€an€estate€isÐ ,| Ða€party€to€the€proceeding.Ð&v` (#` (# ÐÌà  àWhat€a€mess,€huh?€€To€understand€jurisdiction€over€testamentary€trusts€after€HB€1473,€oneÐ j Ðmust€look€to€four€subsections:Ð d ÐÌà0  àððà0` (#(#àTexas€Trust€Code€ðð115.001(d)€states€the€general€jurisdictional€rule€regarding€trusts:Ð  X Ðð ðThe€jurisdiction€of€the€district€court€over€proceedings€concerning€trusts€òòò òis€exclusiveÐ !R Ðexcept€for€jurisdiction€conferred€by€law€on€a€statutory€probate€courtó óóó.€.€.€.ððÐ ü!L Ð[emphasis€added]Ðö"F` (#` (# ÐÌà0  àððà0` (#(#àProbate€Code€ðð5A(b),€as€amended€by€HB€1473,€reads:€òòò òð ðIn€proceedings€in€theÐ ê$: ! Ðstatutory€probate€courtsó óóó€[ò òand€district€courtsó ó],€the€phrases€"appertaining€to€estates"Ð ä%4!" Ðand€"incident€to€an€estate"€in€this€Code€include€the€probate€of€wills,€the€issuance€ofÐ Þ&."# Ðletters€testamentary€and€of€administration,€and€the€determination€of€heirship,€and€alsoÐ Ø'(#$ Ðinclude,€but€are€not€limited€to,€all€claims€by€or€against€an€estate,€all€actions€for€trial€ofÐ Ò("$% Ðtitle€to€land€and€for€the€enforcement€of€liens€thereon,€all€actions€for€trial€of€the€right€ofÐ Ì)%& Ðproperty,€all€actions€to€construe€wills,€òòò òthe€interpretation€and€administration€ofÐ Æ*&' Ðtestamentary€trusts€and€the€applying€of€constructive€trustsó óóó,€and€generally€allÐ À+'( Ðmatters€relating€to€the€òòcollectionóó,€settlement,€partition,€and€distribution€of€estates€ofÐ ° Ðdeceased€persons.€All€statutory€probate€courts€may,€in€the€exercise€of€their€jurisdiction,Ð ªú Ðnotwithstanding€any€other€provisions€of€this€Code,€hear€all€suits,€actions,€andÐ ¤ô Ðapplications€filed€against€or€on€behalf€of€any€heirship€proceeding€or€decedent's€estate,Ð žî Ðincluding€estates€administered€by€an€independent€executor;€all€such€suits,€actions,€andÐ ˜è Ðapplications€are€appertaining€to€and€incident€to€an€estate.€This€subsection€shall€beÐ ’ â Ðconstrued€in€conjunction€with€and€in€harmony€with€Section€145€and€all€other€sections€ofÐ Œ Ü Ðthis€Code€dealing€with€independent€executors,€but€shall€not€be€construed€so€as€toÐ † Ö Ðincrease€permissible€judicial€control€over€independent€executors.€òòòòò òExcept€foró óóóóó€[ò òAllÐ € Ð Ðstatutory€probate€courts€shall€have€the€same€powers€over€independent€executors€thatÐ z Ê  Ðare€exercisable€by€the€district€courts.€Inó ó]€òòò òsituations€òòin€whichóó€[ò òwhereó ó]€theÐ tÄ  Ðjurisdiction€of€a€statutory€probate€court€is€concurrent€with€that€of€a€districtÐ n¾  Ðcourt€òòas€provided€by€Section€5(e)€of€this€Code€or€any€other€courtóó,€any€cause€ofÐ h¸  Ðaction€appertaining€to€estates€or€incident€to€an€estate€shall€be€brought€in€aÐ b²  Ðstatutory€probate€courtó óóó€[ò òrather€than€in€the€district€courtó ó].ðð€[emphasis€added]Ð\¬ ` (#` (# ÐÌà0  àððà0` (#(#àProbate€Code€ðð5(e),€as€amended€by€HB€1473,€reads:€ð ðòòò òA€statutory€probate€courtÐ P  Ðhas€concurrent€jurisdiction€with€the€district€court€inó óóó€allòò€personal€injury,€survival,Ð Jš Ðor€wrongful€deathóó€actions€by€or€against€a€person€in€the€person's€capacity€as€a€personalÐ D” Ðrepresentative,€in€òòò òall€actions€involving€an€inter€vivos€trustó óóó,€in€all€actions€involving€aÐ >Ž Ðcharitable€trust,€and€in€all€actions€involving€a€òòpersonal€representative€of€an€estate€inÐ 8ˆ Ðwhich€each€other€party€aligned€with€the€personal€representative€is€not€an€interestedÐ 2‚ Ðperson€in€that€estateóó€[ò òòòò òtestamentary€trustó óóóó ó].ðð€[emphasis€added]Ð,|` (#` (# ÐÌà0  àððà0` (#(#àProbate€Code€ðð5(h),€which€was€added€by€HB€1473,€reads:€ð ðòòò òA€statutory€probateÐ  p Ðcourt€has€jurisdiction€over€any€matter€appertaining€to€an€estate€or€incident€toÐ j Ðan€estateó óóó€and€has€jurisdiction€over€any€cause€of€action€in€which€a€personalÐ d Ðrepresentative€of€an€estate€pending€in€the€statutory€probate€court€is€a€party.ðð€[emphasisÐ ^ Ðadded]Ð X` (#` (# ÐÌà  àTexas€Trust€Code€ðð115.001(d)€may€be€read€as€òòalwaysóó€vesting€in€the€district€court€jurisdictionÐ ü!L Ðover€testamentary€trusts,€but€allowing€statutory€probate€courts€also€to€have€jurisdiction€if€conferred€byÐ ö"F Ðlaw.€€In€this€case,€filing€a€proceeding€concerning€a€testamentary€trust€always€is€proper€in€the€districtÐ ð#@  Ðcourt.€€On€the€other€hand,€Section€115.001(d)€may€be€read€as€permitting€a€statute€granting€jurisdictionÐ ê$: ! Ðover€testamentary€trusts€to€the€statutory€probate€court€to€completely€strip€the€district€court€ofÐ ä%4!" Ðjurisdiction.€€In€this€case,€one€may€be€required€to€file€a€proceeding€concerning€a€testamentary€trust€inÐ Þ&."# Ðstatutory€probate€court€in€some€cases€and€in€district€court€in€other€cases,€depending€on€where€venueÐ Ø'(#$ Ðlies€and/or€where€the€original€probate€occurred.Ð Ò("$% ÐÌà  àThe€only€basis€for€saying€a€statutory€probate€court€has€jurisdiction€over€a€testamentary€trust€isÐ Æ*&' ÐSection€5A(b)€ð!ð€ð ðthe€interpretation€and€administration€of€testamentary€trusts€and€the€applying€ofÐ À+'( Ðconstructive€trustsðð€is€ð ðincident€to€an€estate.ðð€€Does€this€mean€that€a€proceeding€concerning€theÐ ° Ðinterpretation€and€administration€of€a€testamentary€trust€òòò òalwaysóóó ó€is€ð ðincident€to€an€estate?ðð€€What€aboutÐ ªú Ðthe€case€where€the€probate€proceeding€ended€20€years€ago€and€the€testamentary€trust€has€beenÐ ¤ô Ðadministered€ever€since?€€To€what€ð ðestateðð€is€that€proceeding€ð ðincident?ðð€€If€the€20„year„old€trust€òòò òisóóó óÐ žî Ðð ðincident€to€an€estate,ðð€does€that€mean€the€statutory€probate€court€which€heard€the€original€probateÐ ˜è Ðproceeding€has€jurisdiction,€or€does€it€mean€that€the€statutory€probate€court€in€the€county€where€trustÐ ’ â Ðvenue€lies€(see€Texas€Trust€Code€ðð115.002)€has€jurisdiction?€€If€it€means€that€latter,€how€can€the€trustÐ Œ Ü Ðaction€be€considered€ð ðincident€to€an€estateðð€when€there€never€was€and€never€will€be€an€ð ðestateðð€in€thatÐ † Ö Ðcourt?Ð € Ð ÐÌà  àHereððs€another€one:€€Trust€modification€or€termination€suits€are€ð ðproceedings€concerning€trustsððÐ tÄ  Ðfor€purposes€of€Trust€Code€ðð115.001(d),€but€are€they€proceedings€concerning€ð ðthe€interpretation€andÐ n¾  Ðadministration€of€a€testamentary€trustðð€under€Probate€Code€ðð5A(b)?€€Ð h¸  ÐÓÓÌÓÓà  àUnless€an€appellate€court€gives€direction,€no€one€will€know€where€an€action€concerning€aÐ \¬  Ðtestamentary€trust€may,€or€must,€be€filed€until€the€Legislature€fixes€this€mess€in€2005,€which€it€no€doubtÐ V¦ Ðwill€be€asked€to€do.€€In€the€meantime,€if€ð ðeither€endðð€of€a€case€involving€a€testamentary€trust€ð!ð€theÐ P  Ðoriginal€probate€or€Trust€Code€venue€ð!ð€is€in€a€county€with€a€statutory€probate€court,€the€litigants€couldÐ Jš Ðbe€in€trouble€for€filing€in€the€wrong€court.€€If€the€original€probate€was€in€a€statutory€probate€court,€if€theÐ D” Ðindependent€executor€is€still€alive,€and€if€no€ð ðclosing€affidavitðð€or€other€estate€closing€procedure€wasÐ >Ž Ðutilized,€one€possible€safe€course€of€action€appears€to€be€to€bring€the€proceeding€in€the€statutoryÐ 8ˆ Ðprobate€court€where€the€original€probate€proceeding€was€held€and€make€the€independent€executor€aÐ 2‚ Ðparty,€since€Section€5€always€gives€the€statutory€probate€court€jurisdiction€when€the€personalÐ ,| Ðrepresentative€is€a€party.Ð &v ÐÌà  àHB€1470€amends€Section€608€to€permit€statutory€probate€courts€to€exercise€their€transferÐ j Ðpower€in€cases€where€there€is€a€guardian€of€the€òòpersonóó€only.Ð d ÐÌà  àWhile€the€judges€were€pushing€through€HB€1470€and€HB€1473,€Senator€Robert€Duncan€ofÐ  X ÐLubbock€was€tacking€on€amendments€to€the€main€tort€reform€bill€(HB€4)€attempting€to€restrict€theÐ !R Ðauthority€of€statutory€probate€courts€to€hear€personal€injury,€death€and€property€damage€cases.€€HB€4Ð ü!L Ðamends€Sections€5A,€5B€and€607€to€provide:Ð ö"F ÐÌà8  àNotwithstanding€any€other€provision€of€this€chapter,€the€proper€venue€for€an€action€byÐ ê$: ! Ðor€against€a€personal€representative€for€personal€injury,€death,€or€property€damages€isÐ ä%4!" Ðdetermined€under€Section€15.007,€Civil€Practice€and€Remedies€Code.ÐÞ&."#Ð Ð  ÐÌAs€an€apparent€oversight,€this€same€provision€was€òònotóó€added€to€Section€608€ð!ð€the€guardianshipÐ Ò("$% Ðequivalent€of€Section€5B.Ð Ì)%& ÐÌà  àSection€15.007€of€the€Civil€Practice€and€Remedies€Code€was€enacted€in€1995€in€an€attempt€toÐ À+'( Ðput€a€stop€to€the€transfer€of€personal€injury€and€wrongful€death€cases€by€statutory€probate€courts€fromÐ ° Ðcounties€of€proper€venue€to€counties€where€the€probate€or€guardianship€was€pending.€€One€line€ofÐ ªú Ðcases€in€the€courts€of€appeal€(òòsee,€e.g.,€In€Re€Houston€Northwest€Partners,óó€98€S.€W.€3d€777€(Tex.Ð ¤ô ÐApp.€ð!ð€Austin€2003))€holds€that€Section€15.007€has€no€practical€affect€on€the€authority€of€the€statutoryÐ žî Ðprobate€courts€to€transfer€cases€under€Sections€5B€or€608€because€those€sections€are€jurisdictionÐ ˜è Ðstatutes,€not€venue€statutes.€€Another€case€(òòReliant€Energy€v.€Gonzalesóó,€___€S.€W.€3d€___,€01„02„Ð ’ â Ð00679„CV€(Tex.€App.€ð!ð€Houston€[1òòstóó€Dist.]€2003))€holds€that€Section€15.007€trumps€the€authority€of€aÐ Œ Ü Ðstatutory€probate€court€to€transfer€a€case€from€the€county€of€proper€venue.òòóóÐ † Ö ÐÌÓÓà  àDespite€the€clear€intention€of€its€proponent,€HB€4's€amendments€to€Sections€5A,€5B€and€607Ð z Ê  Ðleave€the€door€open€to€the€courts€to€interpret€them€as€inapplicable€to€Section€5B€and€Section€608Ð tÄ  Ðtransfers,€since€the€amendments€speak€in€terms€of€ð ðvenueðð€rather€than€ð ðjurisdiction.ðð€€No€doubt€thereÐ n¾  Ðwill€be€litigation€on€this€point€shortly€after€HB€4€becomes€effective.€€In€the€meantime,€the€TexasÐ h¸  ÐSupreme€Court€may€give€us€a€pre„HB€4€answer€to€question€of€whether€TCPRC€ðð15.007€trumpsÐ b²  ÐSections€5B€and€608,€or€vice€versa.Ð \¬  ÐÌà  àNote€that€the€HB€4€amendments€to€Sections€5A,€5B€and€607€speak€in€terms€of€suits€for€Ð P  Ðð ðpersonal€injury,€death€or€property€damages,ðð€while€the€HB€1470€and€HB€1473€amendments€toÐ Jš ÐSections€5€and€606€speak€in€terms€of€ð ðpersonal€injury,€survival,€or€wrongful€death€actions.ðð€€This€couldÐ D” Ðlead€to€confusion€and€litigation.€€The€most€obvious€potential€problem€is€the€meaning€of€ð ðpropertyÐ >Ž Ðdamages.ðð€€HB€4€appears€to€be€addressing€tort€cases,€such€as€an€automobile€accident€case€where€thereÐ 8ˆ Ðare€personal€injuries€as€well€as€damage€to€a€car€or€other€property.€€However,€ð ðproperty€damagesððÐ 2‚ Ðcould€be€read€to€have€a€broader€meaning.€€For€example,€a€surcharge€action€against€an€independentÐ ,| Ðexecutor€for€malfeasance€is€a€fiduciary€case,€not€a€tort€case,€but€the€remedy€sought€could€beÐ &v Ðcharacterized€as€ð ðproperty€damages.ðð€€Wouldnððt€it€be€ironic€if€this€language€is€interpreted€broadly,Ð  p Ðmeaning€that€a€person€living€in€Williamson€County€who€is€independent€executor€of€an€estate€pending€inÐ j Ðthe€statutory€probate€court€of€Travis€County€could€insist€on€being€sued€in€a€surcharge€action€in€aÐ d ÐWilliamson€County€district€court€rather€than€in€the€Travis€County€probate€court?Ð ^ ÐÌÔ*lƒZr[ddxdd xarb°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ !R!R €€ ÐÓ  Óò òòòPractice€Pointeróóó óÐ f!¶ ÐÓ  ÓÌIf€you€are€involved,€or€about€to€become€involved,€(a)€in€litigation€involving€a€testamentary€trust€or€(b)Ð Z#ª  Ðin€litigation€in€which€a€personal€representative€of€an€estate€or€a€guardian€is€involved€and€where€theÐ T$¤! Ðguardianship€or€estate€is€pending€in€a€statutory€probate€court,€then€pay€very€careful€attention€to€theÐ N%ž " Ðnew€rules,€because€a€failure€to€file€the€case€in€the€right€court€could€lead€to€disastrous€results.ÐH&˜!#  ÐÌà  àò òÔ  ÔÔ2 # ÔÚ  ÚfÚ  Ú.Ô3  Ôà ` àð ðVoluntaryðð€In„Patient€Psychiatric€Care€for€WardsÔ ic*îÔó óÐ l(¼#$ ÐÌà  àHB€2679€makes€it€possible€for€a€guardian€of€the€person€to€ð ðvoluntarilyðð€admit€the€ward€in€an€in„Ð `*°%& Ðpatient€psychiatric€facility€and€to€consent€to€the€administration€of€medications€in€some€cases.€€There€areÐ Z+ª&' Ðlimits€on€this€authority,€but€this€should€close€a€huge€gap€in€Texas€jurisprudence€that€resulted€in€manyÐ T,¤'( Ðunnecessary€civil€commitment€proceedings.€€(Probate€Code€ðððð€743(b),€767,€770(b)€and€770A;€HeathÐ ° Ðand€Safety€Code€Chapter€573).Ð ªú ÐÌò òÔ  ÔÔ2 # ÔÚ  Ú2Ú  Ú.Ô3  Ôà  àOther€ChangesÔ icñÔó óÐ žî ÐÌà  àò òÔ  ÔÔ2 # ÔÚ  ÚaÚ  Ú.Ô3  Ôà ` àDecedentsðð€EstatesÔ ic»ñÔó óÐ ’ â ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiÚ  Ú.Ô3  Ôà ¸ àEffect€of€Filing€a€Contested€PleadingÔ icqòÔó óÐ † Ö ÐÌà  àHB€1473€added€Section€10C€to€the€Probate€Code,€which€provides€that€the€filing€or€contestingÐ z Ê  Ðin€probate€court€of€any€pleading€relating€to€a€decedent's€estate€does€not€constitute€tortious€interferenceÐ tÄ  Ðwith€inheritance€of€the€estate.€€The€section€says€that€this€does€not€abrogate€the€rights€of€a€person€underÐ n¾  ÐRule€13,€Texas€Rules€of€Civil€Procedure,€or€Chapter€10,€Civil€Practice€and€Remedies€Code.Ð h¸  ÐÌà  àThe€Texas€Supreme€Court€has€not€recognized€a€cause€of€action€for€tortious€interference€withÐ \¬  Ðthe€inheritance€of€an€estate,€although€it€has€been€recognized€at€the€court€of€appeals€level.€€òòSee,€e.g.,Ð V¦ ÐKing€v.€Acker,óó€725€S.€W.€2d€750€(Tex.€App.€ð!ð€Houston€[1òòstóó€Dist.]€1987,€no€writ).€€We€donððt€have€aÐ P  ÐTexas€statute€saying€what€tortious€interference€òòis,óó€but€we€now€have€a€statute€saying€what€it€òòisnððt.óó€Ð Jš ÐÓÓÌÓÓà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiÚ  Ú.Ô3  Ôà ¸ àContracts€Concerning€SuccessionÔ ,€J÷Ôó óÐ >Ž ÐÌà  àHB€1473€amends€Texas€Probate€Code€ðð€59A€to€permit€a€contract€to€make€a€will€or€devise,€orÐ 2‚ Ðnot€to€revoke€a€will€or€devise,€to€be€enforced€if€it€is€contained€in€the€provisions€of€a€written€agreementÐ ,| Ðthat€is€binding€and€enforceable.Ð &v ÐÌà  àIn€1979,€the€Texas€Legislature€added€Section€59A€to€the€Probate€Code.€This€legislation€wasÐ j Ðintended€to€deal€with€two€problems:€First,€and€foremost,€was€the€problem€of€joint€wills.€The€practice€ofÐ d Ðhaving€a€husband€and€wife€sign€a€joint€will€has€mostly€died€out,€but€it€used€to€be€quite€common.€TheseÐ ^ Ðwills€led€to€litigation€over€whether€the€joint€will€was€contractual€„„€whether€the€surviving€spouse€was€freeÐ  X Ðto€adopt€a€different€dispositive€plan€or€was€stuck€with€the€one€in€the€joint€will.€Section€59A€requires€aÐ !R Ðjoint€will€to€say€that€it€is€contractual,€and€its€enactment€in€1979€has€effectively€eliminated€litigation€in€thisÐ ü!L Ðarea.€Second€was€the€problem€of€caregiver€arrangements:€an€alleged€oral€agreement€that€"if€you€moveÐ ö"F Ðin€and€take€care€of€me€until€I€die,€I€promise€to€leave€you€my€house."€òòSee€óóJohanson's€Texas€ProbateÐ ð#@  ÐCode€Annotated€(2002),€Commentary€to€Section€59A.€€.€€Section€59A€dealt€effectively€with€thisÐ ê$: ! Ðproblem€as€well.Ð ä%4!" ÐÌà  àWhile€the€1979€enactment€of€Section€59A€solved€these€two€problems,€it€inadvertently€createdÐ Ø'(#$ Ðanother€problem€„„€the€one€that€HB€1473€fixes.€€Section€59A€was€modeled€after€Section€2„514€of€theÐ Ò("$% ÐUniform€Probate€Code€(UPC).€€€€The€UPC€was€drafted€by€the€National€Conference€of€CommissionersÐ Ì)%& Ðon€Uniform€State€Laws€and€has€been€enacted€in€at€least€18€states.€€The€UPC€version€includes€aÐ Æ*&' Ðsignificant€provision€which€was€left€out€of€Section€59A:€that€a€contract€to€make€a€will€or€not€to€revoke€aÐ À+'( Ðwill€could€be€included€in€a€writing€signed€by€the€decedent€and€evidencing€a€contract€but€not€contained€inÐ ° Ðthe€will€itself.€The€widespread€use€of€marital€property€agreements€which€has€sprung€up€in€Texas€sinceÐ ªú Ð1979€has€illustrated€the€need€for€this€provision€to€be€added€to€Section€59A.€It€is€common€for€aÐ ¤ô Ðtestamentary€conveyance€to€be€a€material€part€of€a€pre„marital€or€post„marital€agreement.€€€Other€typesÐ žî Ðof€agreements€which€contain€these€types€of€provisions€and€are€affected€by€Texas's€failure€to€follow€theÐ ˜è ÐUPC€approach€are€divorce€property€settlement€agreements€and€buy„sell€agreements.€€ManyÐ ’ â Ðpractitioners€and€commentators€believe€that€these€provisions€are€enforceable€even€with€Section€59AÐ Œ Ü Ðreading€the€way€it€read€before€the€HB€1473€change,€but€the€absence€of€a€clear€provision€in€SectionÐ † Ö Ð59A€resulted€in€confusion€and€unnecessary€litigation.Ð € Ð ÐÌà  àThe€change€made€by€HB€1473€ÓÓmakes€it€clear€that€such€a€provision€in€a€marital€propertyÐ tÄ  Ðagreement€or€buy„sell€agreement€is€permitted.€€Ð n¾  ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiiÚ  Ú.Ô3  Ôà ¸ àSatisfaction€of€BequestÔ ,€ìÔó óÐ b²  ÐÌà  àSection€44€of€the€Texas€Probate€Code€deals€with€the€issue€of€an€intestate€donor€giving€propertyÐ V¦ Ðto€an€heir€in€advance€of€his€or€her€death€by€providing€that€these€gifts€are€treated€as€advancements€andÐ P  Ðdeducted€from€the€heir's€share€only€if€the€decedent€declared€in€a€contemporaneous€writing€or€the€heirÐ Jš Ðacknowledged€in€writing€that€the€gift€was€an€advancement€or€otherwise€was€to€be€taken€into€account€inÐ D” Ðdetermining€intestate€shares.€Section€44€does€not€deal€with€the€same€issue€as€it€relates€to€a€donor€with€aÐ >Ž Ðwill.€HB€1473€adds€Section€37C€to€the€Probate€Code,€which€provides€that€a€lifetime€gift€is€treated€as€aÐ 8ˆ Ðsatisfaction€of€a€devise€only€if€the€will€provides€for€deduction€of€the€lifetime€gift,€or€the€testator€declaresÐ 2‚ Ðin€a€contemporaneous€writing€that€the€gift€is€to€be€deducted€from€the€devise€or€is€in€satisfaction€of€theÐ ,| Ðdevise,€or€the€devisee€acknowledges€in€writing€that€the€gift€is€in€satisfaction€of€the€devise.Ð &v ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚivÚ  Ú.Ô3  Ôà ¸ àAllowance€for€Defending€Will€is€an€Administrative€ExpenseÔ ,€ Ôó óÐ j ÐÌà  àSection€243€permits€a€person€who,€in€good€faith€and€just€cause,€seeks€to€have€a€will€admittedÐ ^ Ðto€probate€to€be€awarded€his€or€her€attorneyððs€fees€and€costs€from€the€estate€in€some€cases.€€HB€1473Ð  X Ðamends€Section€322€of€the€Probate€Code€to€make€these€fees€and€costs€administrative€expenses€forÐ !R Ðpriority€purposes€rather€than€general€unsecured€claims.€€This€means€that€they€are€more€likely€to€be€paidÐ ü!L Ðin€an€insolvent€estate€situation.Ð ö"F Ðà  àà ` àÌÓÓà  àò òÔ  ÔÔ2 # ÔÚ  ÚbÚ  Ú.Ô3  Ôà ` àGuardianshipsÔ ,€! Ôó óÐ ê$: ! ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiÚ  Ú.Ô3  Ôà ¸ àTemporary€GuardianshipsÔ ,€Ï Ôó óÐ Þ&."# ÐÌà  àHB€2189€makes€significant€changes€to€Section€875€ð!ð€€the€procedure€for€obtaining€a€temporaryÐ Ò("$% Ðguardianship.€€The€most€significant€change€is€that€no€temporary€guardianship€can€be€granted€before€anÐ Ì)%& Ðapplication€is€filed,€and€immediately€upon€filing€of€an€application€an€attorney€ad€litem€must€be€appointedÐ Æ*&' Ðfor€the€proposed€ward.€€This€is€intended€to€eliminate€the€practice€of€òòex€parteóó€temporary€guardianships,Ð À+'( Ðwhere€the€court€creates€the€temporary€guardianship€before€the€proposed€ward€or€an€attorney€ad€litemÐ ° Ðis€aware€of€what€is€going€on.Ð ªú ÐÌà  àHB€2189€mistakenly€deleted€the€following€sentence€from€Section€875(b):€ð ðA€person€for€whomÐ žî Ða€temporary€guardian€has€been€appointed€may€not€be€presumed€to€be€incapacitated.ðð€€This€sentenceÐ ˜è Ðwas€important€because€it€made€clear€that€the€granting€of€a€temporary€guardianship€did€not€affect€theÐ ’ â Ðpresumption€of€capacity€in€the€permanent€guardianship€proceeding€to€follow.€€The€proponents€of€the€billÐ Œ Ü Ðhad€agreed€to€keep€this€sentence€in€the€statute,€but€it€was€inadvertently€deleted€in€the€SenateÐ † Ö ÐJurisprudence€Committee€late€in€the€session.€€The€proponents€agreed€that€the€granting€of€a€temporaryÐ € Ð Ðguardianship€should€not€be€evidence€of€incapacity€in€a€subsequent€proceeding€to€appoint€a€permanentÐ z Ê  Ðguardian€(òòi.e.,óó€ð ðHe€must€be€crazy.€€Otherwise€the€court€wouldnððt€have€appointed€a€temporaryÐ tÄ  Ðguardian.ðð)Ð n¾  ÐÌÔ*lƒirjddxdd xZr[°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ b² b²  Ðà@AA"ìàò òòòPractice€Pointeróóó óˆÐ Æ  ÐÌAttorneys€ad€litem€representing€proposed€wards€in€temporary€guardianship€proceedings€should€insistÐ º  Ðthat€the€order€appointing€a€temporary€guardian€contains€something€like€the€following:Ð ´ Ðð ðNotwithstanding€the€appointment€of€the€temporary€guardian,€for€purposes€of€any€subsequent€judicialÐ ®þ Ðproceeding€(including€any€application€for€the€appointment€of€a€permanent€guardian€for€the€Ward),€theÐ ¨ø ÐWard€may€not€be€presumed€to€be€incapacitated€and€the€fact€that€a€temporary€guardian€wasÐ ¢ò Ðappointed€may€not€be€entered€into€evidence.ððÐ œì ÐÓÓÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiÚ  Ú.Ô3  Ôà ¸ àLimited€Immunity€of€Guardians€Ad€LitemÔ ¦Ôó óÐ À ÐÌà  àOccasionally€a€guardian€ad€litem€is€appointed€in€a€proceeding€to€create,€terminate€or€modify€aÐ ´ Ðguardianship€and€is€asked€to€express€opinions€to€the€court€regarding€what€is€in€the€best€interests€of€theÐ ®þ Ðward.€€HB€1470€adds€Section€645A€to€the€Probate€Code€to€provide€judicial€immunity€to€guardians€adÐ ¨ø Ðlitem€expressing€such€opinions,€so€long€as€they€do€not€act€wilfully€wrongful,€with€conscious€indifferenceÐ ¢ò Ðor€reckless€disregard,€in€bad€faith,€with€malice€or€in€a€manner€which€is€grossly€negligent.€€This€immunityÐ œ ì Ðdoes€not€apply€in€other€situations€in€which€a€guardian€ad€litem€may€be€appointed.Ð –!æ ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiiÚ  Ú.Ô3  Ôà ¸ àPayment€of€Applicantððs€Attorneyððs€FeesÔ EÔó óÐ Š#Ú ÐÌà  àPreviously,€Probate€Code€ðð665B€permitted€the€court€to€order€that€the€attorneyððs€fees€of€anÐ ~%Î ! Ðapplicant€for€guardianship€who€asked€the€court€to€name€himself€or€herself€as€guardian€to€be€paid€fromÐ x&È!" Ðthe€wardððs€estate.€€HB€1470€amends€the€section€to€permit€the€award€of€attorneyððs€fees€even€if€theÐ r'Â"# Ðapplicant€asks€for€someone€other€than€himself€or€herself€to€be€appointed€guardian.Ð l(¼#$ ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚivÚ  Ú.Ô3  Ôà ¸ àMHMR€Report€for€Mentally€Retarded€Proposed€WardÔ óÔó óÐ `*°%& ÐÌà  àPreviously€Section€687€permitted€a€guardianship€based€on€an€examination€report€of€theÐ T,¤'( ÐDepartment€of€Mental€Health€and€Mental€Retardation€that€was€no€more€than€six€months€old.€€HB€1470Ð ° Ðamends€this€section€to€change€six€months€to€24€months.€€Apparently€MHMR€routinely€re„examinesÐ ªú Ðpersons€in€its€system€every€24€months,€so€this€change€is€consistent€with€that€practice.€€This€does€notÐ ¤ô Ðaffect€the€currency€requirement€for€physicianððs€certificates€for€proposed€wards€who€are€not€mentallyÐ žî Ðretarded.€€Those€certificates€still€must€be€dated€within€120€days€of€filing€the€application.Ð ˜è ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚvÚ  Ú.Ô3  Ôà ¸ àMiller€TrustsÔ ‹"Ôó óÐ Œ Ü ÐÌà  àHB€1470€amends€Section€767€to€permit€a€guardian€of€the€òòpersonóó€to€apply€for€creation€of€aÐ € Ð Ðð ðMiller€trustðð€under€42€U.S.C.€Section€1396p(d)(4)(B).€€HB€1470€also€amends€Section€774€to€permitÐ z Ê  Ðguardians€of€the€òòestateóó€to€apply€for€creation€of€Miller€trusts.€€These€types€of€trusts€help€personsÐ tÄ  Ðqualified€for€governmental€assistance€programs€such€as€Medicaid.Ð n¾  ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚviÚ  Ú.Ô3  Ôà ¸ àDischarge€of€Guardian€When€867€Trust€is€CreatedÔ %Ôó óÐ b²  ÐÌà  àHB€1470€amends€Section€868A€to€eliminate€the€requirement€that€either€a€guardian€of€theÐ V¦ Ðperson€or€guardian€of€the€estate€must€remain€after€the€creation€of€a€guardianship€management€trustÐ P  Ðunder€Section€867€of€the€Probate€Code.Ð Jš ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚviiÚ  Ú.Ô3  Ôà ¸ àIncapacitated€Spouse€Management€Rules€And€Marital€Property€RightsÔ 'Ôó óÐ >Ž ÐÌà  àIn€2001€the€procedure€for€managing€the€community€property€of€an€incapacitated€spouse€wasÐ 2‚ Ðrevamped.€€Section€883€of€the€Probate€Code€was€amended€and€Sections€883A,€883B,€883C€andÐ ,| Ð883D€were€added.€€As€a€result,€it€is€possible€that€management€of€a€married€coupleððs€communityÐ &v Ðproperty€could€be€divided€between€the€competent€spouse€and€a€guardian€of€the€estate€of€theÐ  p Ðincapacitated€spouse.€€HB€1470€amends€Section€883€to€make€it€clear€that€this€division€of€managementÐ j Ðdoes€not€partition€community€property€into€separate€property,€that€the€property€given€to€the€competentÐ d Ðspouse€to€manage€is€that€spouseððs€sole€management€community€property,€that€the€property€given€to€theÐ ^ Ðguardian€to€manage€is€the€incapacitated€spouseððs€sole€management€community€property,€and€that€theÐ  X Ðorder€dividing€the€property€for€management€purposes€does€not€affect€a€creditorððs€claim€existing€on€theÐ !R Ðdate€of€the€order.ÓÓÐ ü!L ÐÌÓÓà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚviiiÚ  Ú.Ô3  Ôà ¸ àApplication€and€CitationÔ _,Ôó óÐ ð#@  ÐÌà  àHB€1470€amends€Section€682€regarding€the€contents€of€the€application€for€guardian.€Ð ä%4!" ÐPreviously€Section€682€(10)€and€(12)€required€the€names€and€addresses€of€certain€persons€(forÐ Þ&."# Ðexample,€a€minor€wardððs€parents)€to€be€listed,€but€it€did€not€state€what€should€happen€if€this€informationÐ Ø'(#$ Ðwas€not€known.€€Thus,€in€a€case€of€a€child€who€was€abandoned€by€one€of€his€or€her€parents,€someÐ Ò("$% Ðcourts€found€the€failure€of€the€applicant€for€a€guardianship€to€list€that€parentððs€address€in€the€applicationÐ Ì)%& Ð(even€though€the€address€was€not€known)€as€an€impediment€to€getting€a€guardianship.€€HB€1470Ð Æ*&' Ðprovides€that€the€information€must€be€stated€ð ðif€known€by€the€applicant.ðð€€It€also€expands€the€list€ofÐ À+'( Ðpersons€whose€names€and€addresses€must€be€listed.Ð ° ÐÌà  àHB€1470€also€amends€Section€633€of€the€Probate€Code€to€eliminate€the€service€of€citation€byÐ ¤ô Ðthe€county€clerk€on€various€persons€when€an€application€for€a€guardianship€is€filed.€€Rather,€theÐ žî Ðapplicant€is€required€to€send€the€notice€to€the€listed€persons€by€certified€mail€and€file€proof€of€deliveryÐ ˜è Ðwith€the€court.€€Any€next€of€kin€required€to€be€listed€on€the€application€by€Section€682€(10)€or€(12)€alsoÐ ’ â Ðmust€receive€this€notice.€€This€does€not€change€the€requirement€of€personal€service€on€the€proposedÐ Œ Ü Ðward.Ð † Ö ÐÌà  àò òÔ  ÔÔ2 # ÔÚ  ÚcÚ  Ú.Ô3  Ôà ` àTrustsÔ -3Ôó óÐ z Ê  ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiÚ  Ú.Ô3  Ôà ¸ àTrust€AccountingsÔ Ô3Ôó óÐ n¾  ÐÌà  àHB€1471€amends€Section€113.151(a)€of€the€Trust€Code€to€impose€a€90„day€deadline€for€trustÐ b²  Ðaccountings.€€Previously€the€accounting€was€due€in€a€ð ðreasonable€time.ðð€€Under€the€change,€the€trusteeÐ \¬  Ðcan€ask€a€court€to€extend€the€deadline€in€appropriate€cases.€€The€amendments€to€this€section€alsoÐ V¦ Ðpermit€a€beneficiary€who€is€forced€to€bring€a€lawsuit€to€enforce€the€accounting€demand€to€recoverÐ P  Ðattorneyððs€fees€and€costs€from€the€trust€or€the€trustee,€in€the€discretion€of€the€court.Ð Jš ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiÚ  Ú.Ô3  Ôà ¸ àTrustee€RemovalÔ Þ6Ôó óÐ >Ž ÐÌà  àHB€1471€amends€Section€113.082€of€the€Trust€Code€to€make€it€clear€that,€upon€theÐ 2‚ Ðoccurrence€of€one€of€the€specific€grounds€for€removal€of€a€trustee€listed€in€the€statute,€the€court€may€òòinÐ ,| Ðits€discretionóó€remove€the€trustee.€€Yes,€ð ðmayðð€should€be€sufficient€to€make€it€clear€that€the€courtððsÐ &v Ðauthority€is€discretionary€without€the€addition€of€ð ðin€its€discretion,ðð€but€two€cases€(òòAkin€v.€Dahl,óó€661€S.Ð  p ÐW.€2d€911,€913€(Tex.€1983),€and€òòLee€v.€Lee,óó€47€S.€W.€3d€767,€785„6€(Tex.€App.€ð!ðð!ð€Houston€[14òòthóóÐ j ÐDist.]€2001))€called€this€into€question.€€The€amendment€also€adds€the€failure€to€make€an€accountingÐ d Ðrequired€by€law€or€the€trust€instrument€to€the€list€of€specific,€discretionary€grounds€for€removal.Ð ^ ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiiÚ  Ú.Ô3  Ôà ¸ àIncome/Principal€Adjustments€in€Charitable€TrustsÔ  ;Ôó óÐ !R ÐÌà  àHB€1471€adds€Section€113.0211€to€the€Trust€Code.€€This€provision€applies€only€to€charitableÐ ö"F Ðtrusts,€and€it€gives€the€trustee€of€a€charitable€trust€the€power€to€adjust€receipts€between€principal€andÐ ð#@  Ðincome.€€This€power€is€similar€to€the€power€given€to€trustees€of€all€types€of€trusts€in€new€SectionÐ ê$: ! Ð116.005.€€It€is€unclear€if€trustees€of€charitable€trusts€must€use€the€Section€113.0211€power€to€adjust€orÐ ä%4!" Ðmay€avail€themselves€of€the€Section€116.005€power€to€adjust.€€A€potential€advantage€of€using€theÐ Þ&."# ÐSection€116.005€adjustment€power€is€the€ability€to€use€the€advisory€opinion€procedure€of€SectionÐ Ø'(#$ Ð116.006.Ð Ò("$% ÐÌà  àò òÔ  ÔÔ2 # ÔÚ  ÚdÚ  Ú.Ô3  Ôà ` àOtherÔ Ê>Ôó óÐ Æ*&' ÐÐ À+'( Ðà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiÚ  Ú.Ô3  Ôà ¸ àCreditor€Protection€for€Section€529€PlansÔ „?Ôó óÐ ° ÐÌà  àSB€1588€adds€Section€42.€0022€to€the€Texas€Property€Code,€making€it€clear€that€Texans'Ð ¤ô Ðinvestments€in€both€types€of€college€savings€plans€(prepaid€tuition€plans€and€Section€529€college€savingsÐ žî Ðplans)€are€exempt€from€creditors€regardless€of€which€state€sponsors€the€plan.€Under€prior€law,€creditorÐ ˜è Ðprotection€was€assured€only€if€Texans€invested€in€one€of€the€Texas„sponsored€plans.€However,€529Ð ’ â Ðplans€of€other€states€are€marketed€to€Texans,€and€this€bill€closes€the€creditor€protection€gap€for€theseÐ Œ Ü Ðplans.ÓÓÐ † Ö ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiÚ  Ú.Ô3  Ôà ¸ àPowers€of€AppointmentÔ ÝBÔó óÐ z Ê  ÐÌà  àTwo€bills€passed€(HB€1472€and€HB€1473)€affecting€powers€of€appointment.€€HB€1473€added€Ð n¾  ÐSection€58c€to€the€Probate€Code,€providing€that€a€residuary€clause€in€a€will,€or€a€will€making€generalÐ h¸  Ðdisposition€of€all€of€the€testator's€property,€does€not€exercise€a€power€of€appointment€held€by€a€testatorÐ b²  Ðunless€specific€reference€is€made€to€the€power€or€there€is€some€other€indication€of€intention€to€includeÐ \¬  Ðthe€property€subject€to€the€power.€HB€1472€adds€Sections€181.081€ð!ð€181.083€to€the€Texas€PropertyÐ V¦ ÐCode,€providing€that,€unless€contrary€intent€is€evidenced€by€the€instrument,€a€donee€who€holds€a€powerÐ P  Ðof€appointment€may€(1)€make€appointments€of€present€or€future€interests€or€both;€(2)€makeÐ Jš Ðappointments€with€conditions€and€limitations;€(3)€make€appointments€with€restraints€on€alienation€uponÐ D” Ðthe€appointed€interests;€(4)€make€appointments€of€interests€to€a€trustee€for€the€benefit€of€one€or€moreÐ >Ž Ðobjects€of€the€power;€(5)€make€appointments€that€create€in€the€object€of€the€power€additional€powersÐ 8ˆ Ðof€appointment€to€permissible€objects€of€the€power€of€appointment€pursuant€to€which€such€powers€areÐ 2‚ Ðcreated;€(6)€if€the€donee€could€appoint€outright€to€the€object€of€a€power,€make€appointments€that€createÐ ,| Ðin€the€object€of€the€power€additional€powers€of€appointment€and€such€powers€of€appointment€may€beÐ &v Ðexercisable€in€favor€of€such€persons€or€entities€as€the€person€creating€such€power€may€direct,€evenÐ  p Ðthought€the€objects€of€such€powers€of€appointment€may€not€have€been€permissible€objects€of€the€powerÐ j Ðof€appointment€pursuant€to€which€such€powers€are€created;€and€(7)€make€appointments€that€create€anyÐ d Ðright€existing€under€common€law.€Most€or€all€of€these€points€are€covered€in€well„drafted€instruments,Ð ^ Ðand€to€a€large€extent€this€may€just€be€a€restatement€of€the€common€law.€In€fact,€the€effective€dateÐ  X Ðprovisions€state€that€these€are€merely€clarifications€of€existing€law.Ð !R ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚiiiÚ  Ú.Ô3  Ôà ¸ àNotice€Required€in€Recorded€Real€Estate€DocumentsÔ 59vLÔó óÐ ö"F ÐÌà  àHB€2930€requires€any€instrument€executed€on€or€after€January€1,€2004,€transferring€an€interestÐ ê$: ! Ðin€real€property€to€or€from€an€individual€to€include€the€following€notice€in€12„point€boldfaced€or€upper„Ð ä%4!" Ðcase€type:Ð Þ&."# ÐÌà8  àNOTICE€OF€CONFIDENTIALITY€RIGHTS:€IF€YOU€ARE€A€NATURALÐ Ò("$% ÐPERSON,€YOU€MAY€REMOVE€OR€STRIKE€ANY€OF€THE€FOLLOWINGÐ Ì)%& ÐINFORMATION€FROM€THIS€INSTRUMENT€BEFORE€IT€IS€FILED€FORÐ Æ*&' ÐRECORD€IN€THE€PUBLIC€RECORDS:€YOUR€SOCIAL€SECURITY€NUMBERÐ À+'( ÐOR€YOUR€DRIVER'S€LICENSE€NUMBER.€Ð°Ð Ð  ÐÌInstrument€not€containing€the€notice€are€still€effective€as€between€the€parties€to€the€instrument€but€òòmayÐ ¤ô Ðnot€be€recorded.óó€€HB€2930€provides€that€the€county€clerk€may€not€reject€an€instrument€presented€forÐ žî Ðrecording€because€the€instrument€contains€or€fails€to€contain€a€social€security€number€or€driver's€licenseÐ ˜è Ðnumber,€but€apparently€it€òòcan€(and€must)óó€reject€it€if€it€does€not€contain€the€notice.€If€the€county€clerkÐ ’ â Ðaccepts€an€instrument€for€recording,€the€recording€of€the€instrument€creates€a€conclusive€presumptionÐ Œ Ü Ðthat€the€requirements€of€this€section€have€been€met.€Ð † Ö ÐÌÔ*lƒ}r~ddxdd xirj°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ z Ê z Ê €€ Ðà@"ìàò òòòPractice€Pointersóóó óˆÐ Þ .  ÐÌ1.à0 l àGet€in€the€habit€of€inserting€the€required€notice€into€all€deeds€and€other€conveyanceÐ Ò"  Ðinstruments.€ÐÌ lÄ"lÄ" ÐÌ2.à0 l àIs€an€affidavit€of€heirship€under€Section€52€and€52A€that€is€recorded€in€the€real€propertyÐ À Ðrecords€an€ð ðinstrument€.€.€.€transferring€an€interest€in€real€propertyðð€for€purposes€of€HBÐ º  Ð2930?€€Probably€not,€since€Tex.€Prob.€Code€ðð52€says€that€the€recorded€document€ð ðshall€beÐ ´ Ðreceived€in€a€proceeding€.€.€.€as€prima€facie€evidence€of€the€facts€therein€stated,ðð€so€theÐ ®þ Ðaffidavit€does€not€transfer€title,€but€rather€evidences€title€transfer.€€Still,€it€cannot€hurt€to€putÐ ¨ø Ðthe€notice€in€the€affidavit.ТòlÄ"lÄ" ÐÌ3.à0 l àDoes€a€foreign€will€recorded€in€the€real€property€records€(see€Tex.€Prob.€Code€ðððð€96€ð!ð€98)Ð –æ Ðtransfer€an€interest€in€real€property?€€Probably€so,€since€Section€98€says€that€the€will€andÐ à Ðrecord€of€its€probate€ð ðshall€take€effect€and€be€valid€and€effectual€as€a€deed€of€conveyance.ðð€Ð ŠÚ ÐPutting€the€notice€on€the€instrument€in€this€case€may€be€impossible,€since€neither€the€foreignÐ „Ô Ðwill€nor€the€copy€of€its€probate€in€the€other€state€are€likely€to€have€the€notice.€€Perhaps€anÐ ~Î Ðaffidavit€containing€the€notice€could€be€attached€as€a€ð ðcover€pageðð€for€the€will€and€record€ofÐ xÈ Ðprobate.€€The€affidavit€is€not€the€ð ðinstrument€.€.€.€transferring€an€interest,ðð€but€.€.€.€.Ð(rÂlÄ"lÄ"  (ÐÓÓÌÓÓà0  àà0` (#(#àò òÔ  ÔÔ2 # ÔÚ  ÚivÚ  Ú.Ô3  Ôà0¸ ` (#` (#àPartners€Owe€Duties€to€Transferees€of€Deceased€PartnersÔ 59RZÔó óЖ!æ¸ (#¸ (# ÐÌà  àHB€1637€amends€the€Texas€Revised€Partnership€Act€to€provide€that€a€partner€owes€a€duty€ofÐ Š#Ú Ðloyalty€and€a€duty€of€care€not€only€to€the€partnership€and€to€the€other€partners€but€also€to€the€transfereeÐ „$Ô  Ðof€a€deceased€partner's€interest.Ð ~%Î ! ÐÓÓÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚvÚ  Ú.Ô3  Ôà ¸ àGestational€AgreementsÔ ~\Ôó óÐ r'Â"# ÐÌà  àHB€729€adopts€a€portion€of€the€Uniform€Parentage€Act€that€deals€with€gestational€agreements.€Ð f)¶$% ÐIt€recognizes€and€authorizes€gestational€agreements€„„€agreements€between€a€birth€mother€and€theÐ `*°%& Ð"intended€parents"€regarding€the€birth€of€a€child.€€These€agreements€may€be€adjudicated€under€theÐ Z+ª&' Ðprocedure€in€the€statute,€thereby€fixing€the€rights€of€the€parties€to€the€agreement.€€HB€729€amendsÐ T,¤'( ÐChapter€160€of€the€Family€Code.€€The€rights€of€the€child,€the€birth€mother€and€the€"intended€parents"€toÐ ° Ðtake€under€the€intestacy€statutes€may€be€affected€by€HB€729.Ð ªú ÐÌÓÓà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚviÚ  Ú.Ô3  Ôà ¸ àMarital€PropertyÔ õ_Ôó óÐ žî ÐÌà  àHB€885€tinkers€with€the€formula€for€determining€a€claim€for€economic€contribution€(FamilyÐ ’ â ÐCode€ðð€3.403),€creates€a€presumption€that€the€partition€and€exchange€of€community€property€intoÐ Œ Ü Ðseparate€property€makes€the€income€from€that€property€separate€property,€too€(Family€Code€ðð€4.102),Ð † Ö Ðand€tinkers€with€the€division€of€quasi„community€property€(or€perhaps€it€should€be€called€quasi„Ð € Ð Ðseparate€property)€on€divorce€(Family€Code€ðð€7.002).Ð z Ê  ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚviiÚ  Ú.Ô3  Ôà ¸ àAccounts€at€Financial€InstitutionsÔ ÕbÔó óÐ n¾  ÐÌà  àTwo€bills€affect€multi„party€accounts.€€HB€2238€loosens€up€the€requirements€for€convenienceÐ b²  Ðaccounts€to€permit€multiple€account€owners€and€convenience€signers€(Probate€Code€Sections€438AÐ \¬  Ðand€439A).€Under€prior€law,€some€thought€that€a€husband€and€wife€could€not€establish€an€account€onÐ V¦ Ðwhich€both€of€them€were€parties€and€owners€but€which€had€a€child€as€a€non„survivorship€convenienceÐ P  Ðsigner.€This€bill€is€intended€to€permit€that€to€occur.€Also,€under€prior€law,€some€thought€that€aÐ Jš Ðconvenience€account€could€not€have€more€than€one€convenience€signer.€This€bill€is€intended€to€permitÐ D” Ðgrandpa€to€have€two€of€his€grandchildren€as€convenience€signers,€not€just€one.Ð >Ž ÐÌà  àÓÓHB€1590€permits€persons€"on"€a€multi„party€account€who€are€not€"owners"€of€the€accountÐ 2‚ Ð(òòe.g.,óó€joint€tenants,€tenants€in€common,€etc.)€to€pledge€the€account€to€secure€a€debt.€Notice€of€theÐ ,| Ðpledge€must€be€given€to€all€parties€to€the€account,€unless€the€account€is€at€a€non„FDIC€institution€(òòi.e.,óó€aÐ &v Ðcredit€union).€"Convenience€signers"€cannot€pledge€the€account€(Probate€Code€Section€442).€Ð  p ÐÓÓÌà  àA€third€bill€does€not€deal€with€multi„party€accounts,€but€it€deals€with€trust€accounts.€€HB€1307€isÐ d Ða€big€bill€dealing€with€many€issues€affecting€credit€unions.€€This€bill€has€one€troubling€provision€(FinanceÐ ^ ÐCode€ðð125.309)€permitting€credit€unions€to€establish€accounts€for€trustees€based€on€a€"certificate€ofÐ  X Ðtrust"€rather€than€a€written€trust€agreement.€A€lot€of€the€ills€of€this€section€can€be€avoided€if€the€settlor,Ð !R Ðtrustee,€beneficiary€or€attorney€gives€the€credit€union€a€copy€of€the€trust€instrument€and€"certifies"€to€itsÐ ü!L Ð"authenticity."€€A€similar€provision€applies€to€trust€accounts€at€banks.Ð ö"F ÐÌÔ*lƒ]r`ddxdd x}r~°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ ê$: !ê$:  €€ ÐÓ  Óò òòòPractice€Pointersó óóóÐ N%ž " ÐÓ  ÓÌ1.à0 l àThe€loosening€of€the€rules€regarding€creation€of€convenience€accounts€with€ð ðconvenienceÐ B'’"$ Ðsigners,ðð€coupled€with€the€changes€to€Section€442€which€permit€non„owners€other€thanÐ <(Œ#% Ðð ðconvenience€signersðð€to€pledge€the€account,€makes€it€that€much€more€important€for€personsÐ 6)†$& Ðusing€multi„party€accounts€in€caregiver€situations€to€use€convenience€accounts€rather€thanÐ 0*€%' Ðsurvivorship€accounts€or€tenants€in€common€accounts.Ð*+z&(lÄ"lÄ" ÐÐ $,t') Ð2.à0 l àAdvise€clients€who€are€trustees€of€trusts€to€deliver€copies€of€the€trust€instrument€to€banks€andÐ d Ðcredit€unions€when€opening€accounts€for€the€trust€òòand€retain€proof€of€delivery€of€theÐ ^ Ðagreement€in€the€trust€records.óó€€Failure€to€do€so€may€permit€the€bank€or€credit€union€toÐ X Ðpay€the€account€proceeds€other€than€is€required€in€the€trust€instrument,€resulting€in€possibleÐ R Ðliability€for€the€trustee.Ð(üLlÄ"lÄ"  (ÐÌÓÓà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚviiiÚ  Ú.Ô3  Ôà ¸ àð ðProbate€Mastersðð€Are€Now€ð ðAssociate€JudgesððÔ diqÔó óÐ  p ÐÌà  àHB€1539€renames€ð ðprobate€mastersðð€in€statutory€probate€courts€to€ð ðassociate€judges.ðð€€It€alsoÐ  d Ðpermits€associate€judges€to€hear€jury€trials€unless€one€of€the€parties€timely€objects.€€(Subchapter€G,Ð ^  ÐChapter€54,€Government€Code.)Ð X  ÐÌà  àà ` àò òÔ  ÔÔ2 # ÔÚ  ÚixÚ  Ú.Ô3  Ôà ¸ àDirectives€to€Physicians€and€Family€or€SurrogatesÔ (sÔó óÐ üL  ÐÌà  àThe€good€news€is€that€there€were€no€changes€to€the€statutory€directive€to€physicians€form.€€SBÐ ð@ Ð1320€focuses€on€what€happens€when€a€physician€or€health€care€facility€refuses€to€honor€the€directionsÐ ê: Ðgiven,€and€it€may€be€useful€in€moving€the€patient€to€a€facility€that€will€comply€with€the€family€memberððsÐ ä4 Ðwishes.Ð Þ. ÐÌò òÔ  ÔÔ2 # ÔÚ  Ú3Ú  Ú.Ô3  Ôà  àThings€That€Could€Have€Been,€But€WerenððtÔ zuÔó óÐ Ò" ÐÌà  àThe€Texas€Bankers€Association€Trust€Services€Division€tried€to€pass€a€bill€and€constitutionalÐ Æ Ðamendment€extending€the€rule€against€perpetuities€for€trusts€to€1,000€years.€€These€measures€failed€toÐ À Ðmake€it€out€of€committee.Ð º  ÐÌà  àThe€Texas€Bankers€Association€Trust€Services€Division€also€tried€to€pass€SB€1668,€whichÐ ®þ Ðwould€have€permitted€a€corporate€trustee€to€buy€insurance€for€a€trust€from€an€affiliated€company.€€ThisÐ ¨ø Ðbill€failed€to€pass.Ð ¢ò ÐÌà  àSeveral€bills€would€have€closed€the€so„called€ð ðDelaware€sub€loophole,ðð€making€some€or€allÐ –!æ Ðlimited€partnerships€subject€to€the€franchise€tax.€€However,€none€of€these€bills€passed,€so€limitedÐ "à Ðpartnerships€are€not€subject€to€the€franchise€tax€for€now.Ð Š#Ú ÐÌà  àSeveral€bills€would€have€tinkered€with€the€state€inheritance€tax,€either€resurrecting€it€from€itsÐ ~%Î ! Ðimpending€death€when€the€state€death€tax€credit€phases€out€or€repealing€it€before€it€dies€a€natural€death.€Ð x&È!" ÐNone€of€these€bills€passed.Ð r'Â"# ÐÌà  àHB€710€would€have€made€substantial€changes€to€the€durable€power€of€attorney€act,€includingÐ f)¶$% Ðchanging€the€statutory€durable€power€of€attorney€form€and€imposing€the€duties€of€a€trustee€on€an€agentÐ `*°%& Ðunder€a€power€of€attorney.€€The€bill€failed€to€get€out€of€committee.Ð Z+ª&' ÐÐ T,¤'( ÐÔ*lƒcrdddxdd x]r`°(#°(#lÔÔ,xdd ÔÔ+  ÔÐ °° ÐÓ  Óò òòòPractice€Pointeróóó óÐ d ÐÓ  ÓÌNone€of€the€major€disability€planning€forms€changed€in€2003.€€This€includes€the€statutory€durableÐ X Ðpower€of€attorney€form,€the€medical€power€of€attorney€form,€the€declaration€of€guardian€form€andÐ R Ðthe€directive€to€physicians€and€family€or€surrogates€form.Ð üL ÐÌÓÓ