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Texas Statutes (Last Updated: January 4, 2014) |
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PROBATE CODE |
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Chapter VIII. PROCEEDINGS DURING ADMINISTRATION |
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Part 4. PRESENTMENT AND PAYMENT OF CLAIMS |
Sec. 329. BORROWING MONEY
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(a) Circumstances Under Which Money May Be Borrowed. Any real or personal property of an estate may be mortgaged or pledged by deed of trust or otherwise as security for an indebtedness, under order of the court, when necessary for any of the following purposes:
(1) For the payment of any ad valorem, income, gift, estate, inheritance, or transfer taxes upon the transfer of an estate or due from a decedent or the estate, regardless of whether such taxes are assessed by a state, or any of its political subdivisions, or by the federal government or by a foreign country; or
(2) For payment of expenses of administration, including sums necessary for operation of a business, farm, or ranch owned by the estate; or
(3) For payment of claims allowed and approved, or established by suit, against the estate; or
(4) To renew and extend a valid, existing lien.
(b) Procedure for Borrowing Money. When it is necessary to borrow money for any of the aforementioned purposes, or to create or extend a lien upon property of the estate as security, a sworn application for such authority shall be filed with the court, stating fully and in detail the circumstances which the representative of the estate believes make necessary the granting of such authority. Thereupon, the clerk shall issue and cause to be posted a citation to all interested persons, stating the nature of the application and requiring such persons, if they choose so to do, to appear and show cause, if any, why such application should not be granted.
(c) Order Authorizing Such Borrowing, or Extension of Lien. The court, if satisfied by the evidence adduced at the hearing upon said application that it is to the interest of the estate to borrow money, or to extend and renew an existing lien, shall issue its order to that effect, setting out the terms and conditions of the authority granted; provided, however, the loan or renewal shall not be for a term longer than three years from the granting of original letters to the representative of such estate, but the court may authorize an extension of such lien for not more than one additional year without further citation or notice. If a new lien is created on property of an estate, the court may require that the representative's general bond be increased, or an additional bond given, for the protection of the estate and the creditors, as for the sale of real property belonging to the estate.