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Texas Probate Code - Section 194. Bonds Of Personal Representatives Of Estates

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§ 194. BONDS OF PERSONAL REPRESENTATIVES OF 
ESTATES.  Except when bond is not required under the provisions of 
this Code, before the issuance of letters testamentary or of 
administration, the recipient of letters shall enter into bond 
conditioned as required by law, payable to the county judge or 
probate judge of the county in which the probate proceedings are 
pending and to his successors in office.  Such bonds shall bear the 
written approval of either of such judges in his official capacity, 
and shall be executed and approved in accordance with the following 
rules:
	1. Court to Fix Penalty.  The penalty of the bond shall be 
fixed by the judge, in an amount deemed sufficient to protect the 
estate and its creditors, as hereinafter provided.
	2. Bond to Protect Creditors Only, When.  If the person to 
whom letters testamentary or of administration is granted is also 
entitled to all of the decedent's estate, after payment of debts, 
the bond shall be in an amount sufficient to protect creditors only, 
notwithstanding the rules applicable generally to bonds of personal 
representatives of estates.
	3. Before Fixing Penalty, Court to Hear Evidence.  In any case 
where a bond is, or shall be, required of a personal representative 
of an estate, the court shall, before fixing the penalty of the 
bond, hear evidence and determine:
	(a)  The amount of cash on hand and where deposited, and the 
amount of cash estimated to be needed for administrative purposes, 
including operation of a business, factory, farm or ranch owned by 
the estate, and expenses of administration for one (1) year;  and
	(b)  The revenue anticipated to be received in the succeeding 
twelve (12) months from dividends, interest, rentals, or use of 
real or personal property belonging to the estate and the aggregate 
amount of any installments or periodical payments to be collected;  
and
	(c)  The estimated value of certificates of stock, bonds, 
notes, or securities of the estate or ward, the name of the 
depository, if any, in which said assets are held for safekeeping, 
the face value of life insurance or other policies payable to the 
person on whose estate administration is sought, or to such estate, 
and such other personal property as is owned by the estate, or by 
one under disability;  and
	(d)  The estimated amount of debts due and owing by the 
estate or ward.      
	4. Penalty of Bond.  The penalty of the bond shall be fixed by 
the judge in an amount equal to the estimated value of all personal 
property belonging to the estate, or to the person under 
disability, together with an additional amount to cover revenue 
anticipated to be derived during the succeeding twelve (12) months 
from interest, dividends, collectible claims, the aggregate amount 
of any installments or periodical payments exclusive of income 
derived or to be derived from federal social security payments, and 
rentals for use of real and personal property;  provided, that the 
penalty of the original bond shall be reduced in proportion to the 
amount of cash or value of securities or other assets authorized or 
required to be deposited or placed in safekeeping by order of court, 
or voluntarily made by the representative or by his sureties as 
hereinafter provided in Subdivisions 6 and 7 hereof.
	5. Agreement as to Deposit of Assets.  It shall be lawful, and 
the court may require such action when deemed in the best interest 
of an estate, for a personal representative to agree with the surety 
or sureties, either corporate or personal, for the deposit of any or 
all cash, and safekeeping of other assets of the estate in a 
financial institution as defined by Section 201.101, Finance Code, 
with its main office or a branch office in this state and qualified 
to act as a depository in this State under the laws of this State or 
of the United States, if such deposit is otherwise proper, in such 
manner as to prevent the withdrawal of such moneys or other assets 
without the written consent of the surety, or an order of the court 
made on such notice to the surety as the court shall direct.  No such 
agreement shall in any manner release from or change the liability 
of the principal or sureties as established by the terms of the 
bond.
	6. Deposits Authorized or Required, When.  Cash or securities 
or other personal assets of an estate or which an estate is entitled 
to receive may, and if deemed by the court in the best interest of 
such estate shall, be deposited or placed in safekeeping as the case 
may be, in one or more of the depositories hereinabove described 
upon such terms as shall be prescribed by the court.  The court in 
which the proceedings are pending, upon its own motion, or upon 
written application of the representative or of any other person 
interested in the estate may authorize or require additional assets 
of the estate then on hand or as they accrue during the pendency of 
the probate proceedings to be deposited or held in safekeeping as 
provided above.  The amount of the bond of the personal 
representative shall be reduced in proportion to the cash so 
deposited, or the value of the securities or other assets placed in 
safekeeping.  Such cash so deposited, or securities or other assets 
held in safekeeping, or portions thereof, may be withdrawn from a 
depository only upon order of the court, and the bond of the 
personal representative shall be increased in proportion to the 
amount of cash or the value of securities or other assets so 
authorized to be withdrawn.
	7. Representative May Deposit Cash or Securities of His Own 
in Lieu of Bond.  It shall be lawful for the personal representative 
of an estate, in lieu of giving surety or sureties on any bond which 
shall be required of him, or for the purpose of reducing the amount 
of such bond, to deposit out of his own assets cash or securities 
acceptable to the court, with a depository such as named above or 
with any other corporate depository approved by the court, if such 
deposit is otherwise proper, said deposit to be equal in amount or 
value to the amount of the bond required, or the bond reduced by the 
value of assets so deposited.
	8. Rules Applicable to Making and Handling Deposits in Lieu 
of Bond or to Reduce Penal Sum of Bond.  (a) A receipt for a deposit 
in lieu of surety or sureties shall be issued by the depository, 
showing the amount of cash or, if securities, the amount and 
description thereof, and agreeing not to disburse or deliver the 
same except upon receipt of a certified copy of an order of the 
court in which the proceedings are pending, and such receipt shall 
be attached to the representative's bond and be delivered to and 
filed by the county clerk after approval by the judge.
	(b)  The amount of cash or securities on deposit may be 
increased or decreased, by order of the court from time to time, as 
the interest of the estate shall require.
	(c)  Deposits in lieu of sureties on bonds, whether of cash 
or securities, may be withdrawn or released only on order of a court 
having jurisdiction.
	(d)  Creditors shall have the same rights against the 
representative and such deposits as are provided for recovery 
against sureties on a bond.
	(e)  The court may on its own motion, or upon written 
application by the representative or by any other person interested 
in the estate, require that adequate bond be given by the 
representative in lieu of such deposit, or authorize withdrawal of 
the deposit and substitution of a bond with sureties therefor.  In 
either case, the representative shall file a sworn statement 
showing the condition of the estate, and unless the same be filed 
within twenty (20) days after being personally served with notice 
of the filing of an application by another, or entry of the court's 
motion, he shall be subject to removal as in other cases.  The 
deposit may not be released or withdrawn until the court has been 
satisfied as to the condition of the estate, has determined the 
amount of bond, and has received and approved the bond.
	9. Withdrawal of Deposits When Estate Closed.  Upon the 
closing of an estate, any such deposit or portion thereof remaining 
on hand, whether of the assets of the representative, or of the 
assets of the estate, or of the surety, shall be released by order 
of court and paid over to the person or persons entitled thereto.  
No writ of attachment or garnishment shall lie against the deposit, 
except as to claims of creditors of the estate being administered, 
or persons interested therein, including distributees and wards, 
and then only in the event distribution has been ordered by the 
court, and to the extent only of such distribution as shall have 
been ordered.
	10. Who May Act as Sureties.  The surety or sureties on said 
bonds may be authorized corporate sureties, or personal sureties.
	11. Procedure When Bond Exceeds Fifty Thousand Dollars 
($50,000).  When any such bond shall exceed Fifty Thousand Dollars 
($50,000) in penal sum, the court may require that such bond be 
signed by two (2) or more authorized corporate sureties, or by one 
such surety and two (2) or more good and sufficient personal 
sureties.  The estate shall pay the cost of a bond with corporate 
sureties.
	12. Qualifications of Personal Sureties.  If the sureties be 
natural persons, there shall not be less than two (2), each of whom 
shall make affidavit in the manner prescribed in this Code, and the 
judge shall be satisfied that he owns property within this State, 
over and above that exempt by law, sufficient to qualify as a surety 
as required by law.  Except as provided by law, only one surety is 
required if the surety is an authorized corporate surety;  
provided, a personal surety, instead of making affidavit, or 
creating a lien on specific real estate when such is required, may, 
in the same manner as a personal representative, deposit his own 
cash or securities, in lieu of pledging real property as security, 
subject, so far as applicable, to the provisions covering such 
deposits when made by personal representatives.
	13. Bonds of Temporary Appointees.  In case of a temporary 
administrator, the bond shall be in such sum as the judge shall 
direct.
	14. Increased or Additional Bonds When Property Sold, Rented, 
Leased for Mineral Development, or Money Borrowed or Invested.  The 
provisions in this Section with respect to deposit of cash and 
safekeeping of securities shall cover, so far as they may be 
applicable, the orders to be entered by the court when real or 
personal property of an estate has been authorized to be sold or 
rented, or money borrowed thereon, or when real property, or an 
interest therein, has been authorized to be leased for mineral 
development or subjected to unitization, the general bond having 
been found insufficient.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956.  Amended by 
Acts 1957, 55th Leg., p. 53, ch. 31, § 6(b), eff. Aug. 22, 1957;  
Acts 1971, 62nd Leg., p. 983, ch. 173, § 14, eff. Jan. 1, 1972;  
Acts 1979, 66th Leg., p. 1754, ch. 713, § 25, eff. Aug. 27, 1979;  
Acts 1993, 73rd Leg., ch. 957, § 31, eff. Sept. 1, 1993;  Acts 
1999, 76th Leg., ch. 344, § 6.003, eff. Sept. 1, 1999.

Last modified: August 10, 2007