| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to durable powers of attorney and the construction of |
|
|
certain powers conferred in those powers of attorney. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Section 751.002(5), Estates Code, is amended to |
|
|
read as follows: |
|
|
(5) "Principal" means an adult individual [person] who |
|
|
signs or directs the signing of the individual's [person's] name on |
|
|
a power of attorney that designates an agent to act on the |
|
|
individual's [person's] behalf. |
|
|
SECTION 2. Section 751.00201, Estates Code, is amended to |
|
|
read as follows: |
|
|
Sec. 751.00201. MEANING OF DISABLED OR INCAPACITATED FOR |
|
|
PURPOSES OF DURABLE POWER OF ATTORNEY. Unless otherwise defined by |
|
|
a durable power of attorney, an individual [a person] is considered |
|
|
disabled or incapacitated for purposes of the durable power of |
|
|
attorney if a physician certifies in writing at a date later than |
|
|
the date the durable power of attorney is executed that, based on |
|
|
the physician's medical examination of the individual [person], the |
|
|
individual [person] is determined to be mentally incapable of |
|
|
managing the individual's [person's] financial affairs. |
|
|
SECTION 3. Section 752.001(a), Estates Code, is amended to |
|
|
read as follows: |
|
|
(a) An individual [A person] may use a statutory durable |
|
|
power of attorney to grant an [attorney in fact or] agent powers |
|
|
with respect to an individual's [a person's] property and financial |
|
|
matters. |
|
|
SECTION 4. Section 752.107, Estates Code, is amended to |
|
|
read as follows: |
|
|
Sec. 752.107. BUSINESS OPERATION TRANSACTIONS. Subject to |
|
|
the terms of an agreement or other document governing or relating to |
|
|
an entity or entity ownership interest, to the extent the agent is |
|
|
permitted by law to act for the principal and unless the power of |
|
|
attorney provides otherwise, the [The] language conferring |
|
|
authority with respect to business operating transactions in a |
|
|
statutory durable power of attorney empowers the [attorney in fact |
|
|
or] agent to: |
|
|
(1) operate, buy, sell, enlarge, reduce, or terminate |
|
|
an ownership [a business] interest; |
|
|
(2) [do the following, to the extent that an attorney |
|
|
in fact or agent is permitted by law to act for a principal and |
|
|
subject to the terms of a partnership agreement: |
|
|
[(A)] perform a duty or[,] discharge a liability, |
|
|
or exercise in person or by proxy a right, power, privilege, or |
|
|
option that the principal has, may have, or claims to have [under |
|
|
the partnership agreement, whether or not the principal is a |
|
|
general or limited partner]; |
|
|
(3) [(B)] enforce the terms of an agreement or other |
|
|
document governing or relating to an entity or entity ownership |
|
|
interest [the partnership agreement by litigation, action, or |
|
|
otherwise]; [and] |
|
|
(4) [(C)] defend, submit to arbitration, settle, or |
|
|
compromise litigation or an action to which the principal is a party |
|
|
because of an entity ownership interest [membership in the |
|
|
partnership]; |
|
|
(5) [(3)] exercise in person or by proxy, or enforce |
|
|
by litigation, action, or otherwise, a right, power, privilege, or |
|
|
option the principal has or claims to have as the holder of a |
|
|
certificated or uncertificated ownership interest; |
|
|
(6) [bond, share, or other similar instrument and] |
|
|
defend, submit to alternative dispute resolution [arbitration], |
|
|
settle, or compromise litigation [a legal proceeding] to which the |
|
|
principal is a party concerning a certificated or uncertificated |
|
|
ownership interest [because of a bond, share, or similar |
|
|
instrument]; |
|
|
(7) [(4)] with respect to a business or entity owned |
|
|
solely by the principal: |
|
|
(A) continue, modify, renegotiate, extend, and |
|
|
terminate a contract made by or on behalf of the principal with |
|
|
respect to the business or entity [before execution of the power of |
|
|
attorney with an individual, legal entity, firm, association, or |
|
|
corporation by or on behalf of the principal with respect to the |
|
|
business]; |
|
|
(B) determine: |
|
|
(i) the location of the business's or |
|
|
entity's operation; |
|
|
(ii) the nature and extent of the business; |
|
|
(iii) the methods of manufacturing, |
|
|
selling, merchandising, financing, accounting, and advertising |
|
|
employed in the business's or entity's operation; |
|
|
(iv) the amount and types of insurance |
|
|
carried; and |
|
|
(v) the method of engaging, compensating, |
|
|
and dealing with the business's or entity's accountants, attorneys, |
|
|
or [and] other agents [and employees]; |
|
|
(C) change the name or form of organization under |
|
|
which the business or entity is operated and enter into an [a |
|
|
partnership] agreement with other persons [or organize a |
|
|
corporation] to take over all or part of the operation of the |
|
|
business or entity; and |
|
|
(D) demand and receive money due or claimed by |
|
|
the principal or on the principal's behalf in the operation of the |
|
|
business or entity and control and disburse the money in the |
|
|
operation of the business or entity; |
|
|
(8) [(5)] put additional capital into a business or |
|
|
entity in which the principal has an interest; |
|
|
(9) [(6)] join in a plan of reorganization, |
|
|
consolidation, interest exchange, conversion, or merger of the |
|
|
business or entity; |
|
|
(10) [(7)] sell or liquidate a business or entity or |
|
|
all or part of the assets of the business or entity [at the time and |
|
|
on the terms that the attorney in fact or agent considers |
|
|
desirable]; |
|
|
(11) [(8)] establish the value of a business or entity |
|
|
under a buy-out agreement to which the principal is a party; |
|
|
(12) [(9) do the following: |
|
|
[(A)] prepare, sign, file, and deliver reports, |
|
|
compilations of information, returns, or other papers with respect |
|
|
to a business or entity and[: |
|
|
[(i) that are required by a governmental |
|
|
agency, department, or instrumentality; or |
|
|
[(ii) that the attorney in fact or agent |
|
|
considers desirable; and |
|
|
[(B)] make related payments; and |
|
|
(13) [(10)] pay, compromise, or contest taxes or |
|
|
assessments and perform any other act [that the attorney in fact or |
|
|
agent considers desirable] to protect the principal from illegal or |
|
|
unnecessary taxation, fines, penalties, or assessments with |
|
|
respect to a business or entity, including attempts to recover, in |
|
|
any manner permitted by law, money paid before or after the |
|
|
execution of the power of attorney. |
|
|
SECTION 5. Section 752.107, Estates Code, as amended by |
|
|
this Act, applies only to a durable power of attorney, including a |
|
|
statutory durable power of attorney, executed on or after the |
|
|
effective date of this Act. A durable power of attorney, including a |
|
|
statutory durable power of attorney, executed before the effective |
|
|
date of this Act is governed by the law in effect on the date the |
|
|
durable power of attorney was executed, and the former law is |
|
|
continued in effect for that purpose. |
|
|
SECTION 6. This Act takes effect September 1, 2021. |