S.B. No. 620

REAL ESTATE, PROBATE AND TRUST LAW SECTION'S POWER OF ATTORNEY BILL

Bill Description

Governor Bush signed SB 620 on May 30, 1997. SB 620 becomes effective September 1, 1997.

IMPORTANT NOTE BEGINNING SEPTEMBER 1, 1997, YOU WILL NEED TO START USING THE NEW STATUTORY DURABLE POWER OF ATTORNEY FORM (unless you prefer to use your own non-statutory form). Click here to download the new statutory form in WordPerfect 5.1 format.

SB 620 is the power of attorney bill supported by the Real Estate, Probate and Trust Law Section of the State Bar of Texas. It makes wholesale changes to the "Statutory Durable Power of Attorney" form. Here are the principal changes to the form:

• The blank for the principal's social security number is deleted.

• The "initial (N) for all of the above" format is dropped in favor of a "cross out the powers you wish to withhold" format. If no powers are crossed out, the new form provides that it will be construed as a general power of appointment.

• A gifting provision (limited to annual exclusion gifts) is added, but the principal must initial this provision for the power to make gifts to apply.

• The "cross out (A) or (B)" format is retained. However, a definition of incapacity is added should the springing power option be chosen.

In addition to changing the statutory form, SB 620 makes the following changes:

• Section 485A is added to automatically terminate a spouse's power to act as agent upon divorce or annulment.

• Section 486 is amended to protect third parties who deal with the ex-spouse as agent without knowledge of the divorce or annulment.

• Section 487 is amended to correspond to the automatic termination of a spouse's power to act as agent on divorce. In addition, subsection (e) is added, to read as follows: "(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." The language in new subsection (e) applied only to statutory durable powers of attorney (in other words, powers of attorney on the statutory form) under the old law. SB 620 makes it applicable to all durable powers of attorney, including those not on the statutory form.
• Section 492 is amended to specifically authorize management of the mineral estate within "Real property transactions."

• Section 503 is amended to provide a definition of "retirement plan."

SB 620 becomes effective September 1, 1997, and applies to powers of attorney executed on or after that date. The old law continues to govern powers of attorney executed prior to that date.

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