S.B. No. 620
DURABLE POWERS OF ATTORNEY
Effective Date: September 1, 1997
AN ACT
relating to durable powers of attorney.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The Durable Power of Attorney Act (Section 481 et seq., Texas Probate Code) is amended by adding Section 485A to read as follows:
Sec. 485A. EFFECT OF PRINCIPAL'S DIVORCE OR MARRIAGE ANNULMENT IF FORMER SPOUSE IS ATTORNEY IN FACT OR AGENT. If, after execution of a durable power of attorney, the principal is divorced from a person who has been appointed the principal's attorney in fact or agent or the principal's marriage to a person who has been appointed the principal's attorney in fact or agent is annulled, the powers of the attorney in fact or agent granted to the principal's former spouse shall terminate on the date on which the divorce or annulment of marriage is granted by a court, unless otherwise expressly provided by the durable power of attorney.
SECTION 2. Section 486, Durable Power of Attorney Act (Section 481 et seq., Texas Probate Code), is amended to read as follows:
Sec. 486. KNOWLEDGE OF DEATH, GUARDIAN OF ESTATE, [OR] REVOCATION,
DIVORCE, OR MARRIAGE ANNULMENT; GOOD-FAITH ACTS. (a) The revocation by, the
death of, or the qualification of a guardian of the estate of a principal who has executed a durable
power of attorney does not revoke or terminate the agency as to the attorney in fact, agent, or
other person who, without actual knowledge of the termination of the power by revocation, by
the principal's death, or by the qualification of a guardian of the estate of the principal, acts in
good faith under or in reliance on the power.
(b) The divorce of a principal from a person who has been appointed the principal's attorney in fact or agent before the date on which the divorce is granted or the annulment of the marriage of a principal and a person who has been appointed the principal's attorney in fact or agent before the date the annulment is granted does not revoke or terminate the agency as to a person other than the principal's former spouse if the person acts in good faith under or in reliance on the power.
(c) Any action [so] taken under this section, unless otherwise invalid or unenforceable, binds
successors in interest of the principal.
SECTION 3. Section 487, Durable Power of Attorney Act (Section 481 et seq., Texas Probate Code), is amended to read as follows:
Sec. 487. AFFIDAVIT OF LACK OF KNOWLEDGE OR TERMINATION OF POWER; RECORDING; GOOD-FAITH RELIANCE. (a) As to acts undertaken in good-faith reliance on the durable power of attorney, an affidavit executed by the attorney in fact or agent under a durable power of attorney stating that the attorney in fact or agent did not have at the time of exercise of the power actual knowledge of the termination of the power by revocation, by the principal's death, by the principal's divorce or the annulment of the marriage of the principal if the attorney in fact or agent was the principal's spouse, or by the qualification of a guardian of the estate of the principal is conclusive proof as between the attorney in fact or agent and a person other than the principal or the principal's personal representative dealing with the attorney in fact or agent of the nonrevocation or nontermination of the power at that time.
(b) As to acts undertaken in good-faith reliance on the durable power of attorney, an affidavit executed by the attorney in fact or agent under a durable power of attorney stating that the principal is disabled or incapacitated, as defined by the power, is conclusive proof as between the attorney in fact or agent and a person other than the principal or the principal's personal representative dealing with the attorney in fact or agent of the disability or incapacity of the principal at that time.
(c) If the exercise of the power of attorney requires execution and delivery of any instrument that is to be recorded, an affidavit executed under Subsection (a) or (b) of this section, when authenticated for record, may also be recorded.
(d) This section does not affect any provision in a durable power of attorney for its termination by expiration of time or occurrence of an event other than express revocation.
(e) When a durable power of attorney is used, a third party who relies in good faith on the acts of an attorney in fact or agent within the scope of the power of attorney is not liable to the principal.
SECTION 4. Subsection (a), Section 490, Durable Power of Attorney Act (Section 481 et seq., Texas Probate Code), is amended to read as follows:
(a) The following form is known as a "statutory durable power of attorney." A person may use a statutory durable power of attorney to grant an attorney in fact or agent powers with respect to a person's property and financial matters. A power of attorney in substantially the following form has the meaning and effect prescribed by this chapter. The validity of a power of attorney as meeting the requirements of a statutory durable power of attorney is not affected by the fact that one or more of the categories of optional powers listed in the form are struck or the form includes specific limitations on or additions to the attorney in fact's or agent's powers.
[When a power in substantially the form set forth in this chapter is used, third parties who rely in
good faith on the acts of the agent within the scope of the power may do so without fear of
liability to the principal.]
The following form is not exclusive, and other forms of power of attorney may be used.
STATUTORY DURABLE POWER OF ATTORNEY
NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING. THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT, CHAPTER XII, TEXAS PROBATE CODE. IF YOU HAVE ANY QUESTIONS ABOUT THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES NOT AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU LATER WISH TO DO SO.
I, __________ (insert your name and address), [my social security number being __________
(insert your proper SS#),] appoint __________ (insert the name and address of the person
appointed) as my agent (attorney-in-fact) to act for me in any lawful way with respect to all of the
following powers except for a power that I have crossed out below.
TO WITHHOLD A POWER, YOU MUST CROSS OUT EACH POWER WITHHELD.
Real property transactions;
Tangible personal property transactions;
Stock and bond transactions;
Commodity and option transactions;
Banking and other financial institution transactions;
Business operating transactions;
Insurance and annuity transactions;
Estate, trust, and other beneficiary transactions;
Claims and litigation;
Personal and family maintenance;
Benefits from social security, Medicare, Medicaid, or other governmental programs or civil or military service;
Retirement plan transactions;
Tax matters.
IF NO POWER LISTED ABOVE IS CROSSED OUT, THIS DOCUMENT SHALL BE CONSTRUED AND INTERPRETED AS A GENERAL POWER OF ATTORNEY AND MY AGENT (ATTORNEY IN FACT) SHALL HAVE THE POWER AND AUTHORITY TO PERFORM OR UNDERTAKE ANY ACTION I COULD PERFORM OR UNDERTAKE IF I WERE PERSONALLY PRESENT
[the following initialed subjects:
[TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN FRONT OF (N)
AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS.
[TO GRANT ONE OR MORE, BUT FEWER THAN ALL, OF THE FOLLOWING POWERS,
INITIAL THE LINE IN FRONT OF EACH POWER YOU ARE GRANTING.
[TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF IT. YOU MAY,
BUT NEED NOT, CROSS OUT EACH POWER WITHHELD.
[INITIAL
[_______ (A) real property transactions;
[_______ (B) tangible personal property transactions;
[_______ (C) stock and bond transactions;
[_______ (D) commodity and option transactions;
[_______ (E) banking and other financial institution transactions;
[_______ (F) business operating transactions;
[_______ (G) insurance and annuity transactions;
[_______ (H) estate, trust, and other beneficiary transactions;
[_______ (I) claims and litigation;
[_______ (J) personal and family maintenance;
[_______ (K) benefits from social security, Medicare, Medicaid, or other governmental programs
or civil or military service;
[_______ (L) retirement plan transactions;
[_______ (M) tax matters;
[_______ (N) ALL OF THE POWERS LISTED IN (A) THROUGH (M). YOU NEED NOT
INITIAL ANY OTHER LINES IF YOU INITIAL LINE (N)].
SPECIAL INSTRUCTIONS:
Special instructions applicable to gifts (initial in front of the following sentence to have it apply):
I grant my agent (attorney in fact) the power to apply my property to make gifts, except that the amount of a gift to an individual may not exceed the amount of annual exclusions allowed from the federal gift tax for the calendar year of the gift.
ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.
___________________________________________________________________
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___________________________________________________________________
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UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.
CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE ALTERNATIVE NOT CHOSEN:
(A) This power of attorney is not affected by my subsequent disability or incapacity.
(B) This power of attorney becomes effective upon my disability or incapacity.
YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.
IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED THAT YOU CHOSE ALTERNATIVE (A).
If Alternative (B) is chosen and a definition of my disability or incapacity is not contained in this power of attorney, I shall be considered disabled or incapacitated for purposes of this power of attorney if a physician certifies in writing at a date later than the date this power of attorney is executed that, based on the physician's medical examination of me, I am mentally incapable of managing my financial affairs. I authorize the physician who examines me for this purpose to disclose my physical or mental condition to another person for purposes of this power of attorney. A third party who accepts this power of attorney is fully protected from any action taken under this power of attorney that is based on the determination made by a physician of my disability or incapacity.
I agree that any third party who receives a copy of this document may act under it. Revocation of the durable power of attorney is not effective as to a third party until the third party receives actual notice of the revocation. I agree to indemnify the third party for any claims that arise against the third party because of reliance on this power of attorney.
If any agent named by me dies, becomes legally disabled, resigns, or refuses to act, I name the following (each to act alone and successively, in the order named) as successor(s) to that agent: __________.
Signed this ______ day of __________, 19___
__________________________________
(your signature)
State of _______________________
County of ______________________
This document was acknowledged before me on
__________________________(date) by _______________________________
(name of principal)
_________________________________
(signature of notarial officer)
(Seal, if any, of notary) ___________________________________
(printed name)
My commission expires: __________
THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR ACTING UNDER THE APPOINTMENT, ASSUMES THE FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT.
SECTION 5. Section 492, Durable Power of Attorney Act (Section 481 et seq., Texas Probate Code), is amended to read as follows:
Sec. 492. CONSTRUCTION OF POWER RELATING TO REAL PROPERTY TRANSACTIONS. In a statutory durable power of attorney, the language conferring authority with respect to real property transactions empowers the attorney in fact or agent without further reference to a specific description of the real property to:
(1) accept as a gift or as security for a loan or reject, demand, buy, lease, receive, or otherwise acquire an interest in real property or a right incident to real property;
(2) sell, exchange, convey with or without covenants, quitclaim, release, surrender, mortgage, encumber, partition, consent to partitioning, subdivide, apply for zoning, rezoning, or other governmental permits, plat or consent to platting, develop, grant options concerning, lease or sublet, or otherwise dispose of an estate or interest in real property or a right incident to real property;
(3) release, assign, satisfy, and enforce by litigation, action, or otherwise a mortgage, deed of trust, encumbrance, lien, or other claim to real property that exists or is claimed to exist;
(4) do any act of management or of conservation with respect to an interest in real property, or a right incident to real property, owned or claimed to be owned by the principal, including power to:
(A) insure against a casualty, liability, or loss;
(B) obtain or regain possession or protect the interest or right by litigation, action, or otherwise;
(C) pay, compromise, or contest taxes or assessments or apply for and receive refunds in
connection with them; [and]
(D) purchase supplies, hire assistance or labor, or make repairs or alterations in the real property; and
(E) manage and supervise an interest in real property, including the mineral estate, by, for example, entering into a lease for oil, gas, and mineral purposes, making contracts for development of the mineral estate, or making pooling and unitization agreements;
(5) use, develop, alter, replace, remove, erect, or install structures or other improvements on real property in which the principal has or claims to have an estate, interest, or right;
(6) participate in a reorganization with respect to real property or a legal entity that owns an interest in or right incident to real property, receive and hold shares of stock or obligations received in a plan or reorganization, and act with respect to the shares or obligations, including:
(A) selling or otherwise disposing of the shares or obligations;
(B) exercising or selling an option, conversion, or similar right with respect to the shares or obligations; and
(C) voting the shares or obligations in person or by proxy;
(7) change the form of title of an interest in or right incident to real property; and
(8) dedicate easements or other real property in which the principal has or claims to have an interest to public use, with or without consideration.
SECTION 6. Section 503, Durable Power of Attorney Act (Section 481 et seq., Texas Probate Code), is amended to read as follows:
Sec. 503. CONSTRUCTION OF POWER RELATING TO RETIREMENT PLAN TRANSACTIONS. (a) In a statutory durable power of attorney, the language conferring authority with respect to retirement plan transactions empowers the attorney in fact or agent to do any lawful act the principal may do with respect to a transaction relating to a retirement plan, including to:
(1) apply for service or disability retirement benefits;
(2) select payment options under any retirement plan in which the principal participates, including plans for self-employed individuals;
(3) designate or change the designation of a beneficiary or benefits payable by a retirement plan, except that an attorney in fact or agent may be named a beneficiary only to the extent the attorney in fact or agent was a named beneficiary under the retirement plan before the durable power of attorney was executed;
(4) make voluntary contributions to retirement plans if authorized by the plan;
(5) exercise the investment powers available under any self-directed retirement plan;
(6) make "rollovers" of plan benefits into other retirement plans;
(7) borrow from, sell assets to, and purchase assets from retirement plans if authorized by the plan;
(8) waive the right of the principal to be a beneficiary of a joint or survivor annuity if the principal is a spouse who is not employed;
(9) receive, endorse, and cash payments from a retirement plan;
(10) waive the right of the principal to receive all or a portion of benefits payable by a retirement plan; and
(11) request and receive information relating to the principal from retirement plan records.
(b) In this section, "retirement plan" means:
(1) an employee pension benefit plan as defined by Section 1002, Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. Section 1002), without regard to the provisions of Section (2)(B) of that section;
(2) a plan that does not meet the definition of an employee benefit plan under ERISA because the plan does not cover common law employees;
(3) a plan that is similar to an employee benefit plan under ERISA, regardless of whether it is covered by Title I of ERISA, including a plan that provides death benefits to the beneficiary of employees; and
(4) an individual retirement account or annuity or a self-employed pension plan or similar plan or account.
SECTION 7. Subsection (c), Section 490, Durable Power of Attorney Act (Section 481 et seq., Texas Probate Code), is repealed.
SECTION 8. This Act takes effect September 1, 1997, and applies only to a durable power of attorney or statutory durable power of attorney that is executed on or after that date. A durable power of attorney or statutory durable power of attorney that is executed before the effective date of this Act is governed by the law in effect on the date the power of attorney was executed, and the former law is continued in effect for that purpose.
SECTION 9. 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.