H.B. No. 881

PRIORITY FOR FUNERAL EXPENSES AND EXPENSES OF LAST ILLNESS INCREASED TO $15,000

Effective Date: September 1, 1997

AN ACT

relating to the priority of payment of claims against a decedent's estate.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Section 320(a), Texas Probate Code, is amended to read as follows:

(a)  Priority of Payments. Personal representatives, when they have funds in their hands belonging to the estate, shall pay in the following order:

(1)  Funeral expenses and expenses of last sickness, in an amount not to exceed Fifteen [Five] Thousand Dollars.

(2)  Allowances made to the surviving spouse and children, or to either.

(3)  Expenses of administration and the expenses incurred in the preservation, safekeeping, and management of the estate.

(4)  Other claims against the estate in the order of their classification.

SECTION 2.  Section 322, Texas Probate Code, is amended to read as follows:

Sec. 322.  CLASSIFICATION OF CLAIMS AGAINST ESTATES OF DECEDENT. Claims against an estate of a decedent shall be classified and have priority of payment, as follows:

Class 1.  Funeral expenses and expenses of last sickness for a reasonable amount to be approved by the court, not to exceed a total of Fifteen Thousand Dollars [Five Thousand Dollars], with any excess to be classified and paid as other unsecured claims.

Class 2.  Expenses of administration and expenses incurred in the preservation, safekeeping, and management of the estate.

Class 3.  Secured claims for money under Section 306(a)(1), including tax liens, so far as the same can be paid out of the proceeds of the property subject to such mortgage or other lien, and when more than one mortgage, lien, or security interest shall exist upon the same property, they shall be paid in order of their priority.

Class 4.  Claims for taxes, penalties, and interest due under Title 2, Tax Code; Chapter 8, Title 132, Revised Statutes; Section 81.111, Natural Resources Code; the Municipal Sales and Use Tax Act (Chapter 321, Tax Code); Section 451.404, Transportation Code [Section 11B, Chapter 141, Acts of the 63rd Legislature, Regular Session, 1973 (Article 1118x, Vernon's Texas Civil Statutes)]; or Subchapter I, Chapter 452, Transportation Code [Section 16, Chapter 683, Acts of the 66th Legislature, Regular Session, 1979 (Article 1118y, Vernon's Texas Civil Statutes)].

Class 5.  Claims for the cost of confinement established by the institutional division of the Texas Department of Criminal Justice under Section 501.017, Government Code.

Class 6.  Claims for repayment of medical assistance payments made by the state under Chapter 32, Human Resources Code, to or for the benefit of the decedent.

Class 7.  All other claims.

SECTION 3.  This Act takes effect September 1, 1997, and applies only to the estate of a person who dies on or after that date. The estate of a person who dies before the effective date of this Act is governed by the law in effect at the time of the person's death and that law is continued in effect for that purpose.

SECTION 4.  The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.