By: Thompson, S. H.B. No. 671 By____________________ __B. No.______ 73R2420 CLG-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the adoption of the Durable Power of Attorney Act. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. The Texas Probate Code is amended by adding 1-5 Chapter XII to read as follows: 1-6 CHAPTER XII. DURABLE POWER OF ATTORNEY ACT 1-7 Sec. 481. SHORT TITLE. This chapter may be cited as the 1-8 Durable Power of Attorney Act. 1-9 Sec. 482. DEFINITION. A "durable power of attorney" means a 1-10 written instrument that: 1-11 (1) designates another person as attorney in fact or 1-12 agent; 1-13 (2) is signed by an adult principal; 1-14 (3) contains the words "This power of attorney is not 1-15 affected by subsequent disability or incapacity of the principal," 1-16 or "This power of attorney becomes effective on the disability or 1-17 incapacity of the principal," or similar words showing the 1-18 principal's intent that the authority conferred on the attorney in 1-19 fact or agent shall be exercised notwithstanding the principal's 1-20 subsequent disability or incapacity; and 1-21 (4) is acknowledged by the principal before an officer 1-22 authorized to take acknowledgments to deeds of conveyance and to 1-23 administer oaths under the laws of this state or any other state. 1-24 Sec. 483. DURATION. A durable power of attorney does not 2-1 lapse because of the passage of time unless the instrument creating 2-2 the power of attorney specifically states a time limitation. 2-3 Sec. 484. EFFECT OF ACTS BY ATTORNEY IN FACT OR AGENT DURING 2-4 INCAPACITY OF PRINCIPAL. All acts done by an attorney in fact or 2-5 agent pursuant to a durable power of attorney during any period of 2-6 disability or incapacity of the principal have the same effect and 2-7 inure to the benefit of and bind the principal and the principal's 2-8 successors in interest as if the principal were not disabled or 2-9 incapacitated. 2-10 Sec. 485. RELATION OF ATTORNEY IN FACT OR AGENT TO 2-11 COURT-APPOINTED GUARDIAN OF ESTATE. If, after execution of a 2-12 durable power of attorney, a court of the principal's domicile 2-13 appoints a guardian of the estate of the principal, the powers of 2-14 the attorney in fact or agent terminate on the qualification of the 2-15 guardian of the estate, and the attorney in fact or agent shall 2-16 deliver to the guardian of the estate all assets of the estate of 2-17 the ward in the attorney's or agent's possession and shall account 2-18 to the guardian of the estate as the attorney or agent would to the 2-19 principal had the principal terminated his powers. 2-20 Sec. 486. KNOWLEDGE OF DEATH, GUARDIAN OF ESTATE, OR 2-21 REVOCATION; GOOD-FAITH ACTS. The revocation by, the death of, or 2-22 the qualification of a guardian of the estate of a principal who 2-23 has executed a durable power of attorney does not revoke or 2-24 terminate the agency as to the attorney in fact, agent, or other 2-25 person who, without actual knowledge of the termination of the 2-26 power by revocation, by the principal's death, or by the 2-27 qualification of a guardian of the estate of the principal, acts in 3-1 good faith under or in reliance on the power. Any action so taken, 3-2 unless otherwise invalid or unenforceable, binds successors in 3-3 interest of the principal. 3-4 Sec. 487. AFFIDAVIT OF LACK OF KNOWLEDGE OR TERMINATION OF 3-5 POWER; RECORDING. (a) As to acts undertaken in good-faith 3-6 reliance on the durable power of attorney, an affidavit executed by 3-7 the attorney in fact or agent under a durable power of attorney 3-8 stating that the attorney in fact or agent did not have at the time 3-9 of exercise of the power actual knowledge of the termination of the 3-10 power by revocation, by the principal's death, or by the 3-11 qualification of a guardian of the estate of the principal is 3-12 conclusive proof as between the attorney in fact or agent and a 3-13 person other than the principal or the principal's personal 3-14 representative dealing with the attorney in fact or agent of the 3-15 nonrevocation or nontermination of the power at that time. 3-16 (b) As to acts undertaken in good-faith reliance on the 3-17 durable power of attorney, an affidavit executed by the attorney in 3-18 fact or agent under a durable power of attorney stating that the 3-19 principal is disabled or incapacitated, as defined by the power, is 3-20 conclusive proof as between the attorney in fact or agent and a 3-21 person other than the principal or the principal's personal 3-22 representative dealing with the attorney in fact or agent of the 3-23 disability or incapacity of the principal at that time. 3-24 (c) If the exercise of the power of attorney requires 3-25 execution and delivery of any instrument that is to be recorded, an 3-26 affidavit executed under Subsection (a) or (b) of this section, 3-27 when authenticated for record, may also be recorded. 4-1 (d) This section does not affect any provision in a durable 4-2 power of attorney for its termination by expiration of time or 4-3 occurrence of an event other than express revocation. 4-4 Sec. 488. REVOCATION OF DURABLE POWER OF ATTORNEY. A 4-5 revocation of a durable power of attorney is not effective as to a 4-6 third party relying on the power of attorney until the third party 4-7 receives actual notice of the revocation. 4-8 Sec. 489. RECORDING DURABLE POWER OF ATTORNEY FOR REAL 4-9 PROPERTY TRANSACTIONS. A durable power of attorney for a real 4-10 property transaction requiring the execution and delivery of an 4-11 instrument that is to be recorded, including a release, assignment, 4-12 satisfaction, mortgage, security agreement, deed of trust, 4-13 encumbrance, deed of conveyance, oil, gas, or other mineral lease, 4-14 memorandum of a lease, lien, or other claim or right to real 4-15 property shall be recorded in the office of the county clerk of the 4-16 county in which the property is located. 4-17 Sec. 490. STATUTORY DURABLE POWER OF ATTORNEY. (a) The 4-18 following form is known as a "statutory durable power of attorney." 4-19 A person may use a statutory durable power of attorney to grant an 4-20 attorney in fact or agent powers with respect to a person's 4-21 property and financial matters. A power of attorney in 4-22 substantially the following form has the meaning and effect 4-23 prescribed by this chapter. The validity of a power of attorney as 4-24 meeting the requirements of a statutory durable power of attorney 4-25 is not affected by the fact that one or more of the categories of 4-26 optional powers listed in the form are struck or the form includes 4-27 specific limitations on or additions to the attorney in fact's or 5-1 agent's powers. 5-2 When a power in substantially the form set forth in this 5-3 chapter is used, third parties who rely in good faith on the acts 5-4 of the agent within the scope of the power may do so without fear 5-5 of liability to the principal. 5-6 The following form is not exclusive, and other forms of power 5-7 of attorney may be used. 5-8 STATUTORY DURABLE POWER OF ATTORNEY 5-9 NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND 5-10 SWEEPING. THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT, 5-11 CHAPTER XII, TEXAS PROBATE CODE. IF YOU HAVE ANY QUESTIONS ABOUT 5-12 THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES 5-13 NOT AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE 5-14 DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU 5-15 LATER WISH TO DO SO. 5-16 I, (insert your name and address), 5-17 appoint (insert the name and address of 5-18 the person appointed) as my agent (attorney-in-fact) to act for me 5-19 in any lawful way with respect to the following initialed subjects: 5-20 TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN 5-21 FRONT OF (N) AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS. 5-22 TO GRANT ONE OR MORE, BUT FEWER THAN ALL, OF THE FOLLOWING 5-23 POWERS, INITIAL THE LINE IN FRONT OF EACH POWER YOU ARE GRANTING. 5-24 TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF IT. 5-25 YOU MAY, BUT NEED NOT, CROSS OUT EACH POWER WITHHELD. 5-26 INITIAL 5-27 (A) real property transactions; 6-1 (B) tangible personal property transactions; 6-2 (C) stock and bond transactions; 6-3 (D) commodity and option transactions; 6-4 (E) banking and other financial institution 6-5 transactions; 6-6 (F) business operating transactions; 6-7 (G) insurance and annuity transactions; 6-8 (H) estate, trust, and other beneficiary transactions; 6-9 (I) claims and litigation; 6-10 (J) personal and family maintenance; 6-11 (K) benefits from social security, Medicare, Medicaid, 6-12 or other governmental programs or military service; 6-13 (L) retirement plan transactions; 6-14 (M) tax matters; 6-15 (N) ALL OF THE POWERS LISTED IN (A) THROUGH (M). YOU 6-16 NEED NOT INITIAL ANY OTHER LINES IF YOU INITIAL LINE 6-17 (N). 6-18 SPECIAL INSTRUCTIONS: 6-19 ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS 6-20 LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT. 6-21 ___________________________________________________________________ 6-22 ___________________________________________________________________ 6-23 ___________________________________________________________________ 6-24 ___________________________________________________________________ 6-25 ___________________________________________________________________ 6-26 ___________________________________________________________________ 6-27 ___________________________________________________________________ 7-1 ___________________________________________________________________ 7-2 ___________________________________________________________________ 7-3 ___________________________________________________________________ 7-4 UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS 7-5 EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED. 7-6 CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE 7-7 ALTERNATIVE NOT CHOSEN: 7-8 (A) This power of attorney is not affected by my 7-9 subsequent disability or incapacity. 7-10 (B) This power of attorney becomes effective upon my 7-11 disability or incapacity. 7-12 YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY 7-13 IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED. 7-14 IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED 7-15 THAT YOU CHOSE ALTERNATIVE (A). 7-16 I agree that any third party who receives a copy of this 7-17 document may act under it. Revocation of the durable power of 7-18 attorney is not effective as to a third party until the third party 7-19 receives actual notice of the revocation. I agree to indemnify the 7-20 third party for any claims that arise against the third party 7-21 because of reliance on this power of attorney. 7-22 If any agent named by me dies, becomes legally disabled, 7-23 resigns, or refuses to act, I name the following (each to act alone 7-24 and successively, in the order named) as successor(s) to that 7-25 agent: . 7-26 Signed this ____________ day of ______________________, 19___ 7-27 __________________________________ 8-1 (your signature) 8-2 State of ____________________ 8-3 County of ___________________ 8-4 This document was acknowledged before me on 8-5 _______________________ (date) by _________________________________ 8-6 (name of principal) 8-7 _________________________________ 8-8 (signature of notarial officer) 8-9 (Seal, if any, of 8-10 notary) _________________________________ 8-11 (printed name) 8-12 My commission expires: _________ 8-13 THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR ACTING UNDER 8-14 THE APPOINTMENT, ASSUMES THE FIDUCIARY AND OTHER LEGAL 8-15 RESPONSIBILITIES OF AN AGENT. 8-16 (b) A statutory durable power of attorney is legally 8-17 sufficient under this chapter if the wording of the form complies 8-18 substantially with Subsection (a) of this section, the form is 8-19 properly completed, and the signature of the principal is 8-20 acknowledged. 8-21 (c) If the line in front of (N) of the form under Subsection 8-22 (a) of this section is initialed, an initial on the line in front 8-23 of any other power does not limit the powers granted by line (N). 8-24 Sec. 491. CONSTRUCTION OF POWERS GENERALLY. The principal, 8-25 by executing a statutory durable power of attorney that confers 8-26 authority with respect to any class of transactions, empowers the 8-27 attorney in fact or agent for that class of transactions to: 9-1 (1) demand, receive, and obtain by litigation, action, 9-2 or otherwise any money or other thing of value to which the 9-3 principal is, may become, or may claim to be entitled; 9-4 (2) conserve, invest, disburse, or use any money or 9-5 other thing of value received on behalf of the principal for the 9-6 purposes intended; 9-7 (3) contract in any manner with any person, on terms 9-8 agreeable to the attorney in fact or agent, to accomplish a purpose 9-9 of a transaction, and perform, rescind, reform, release, or modify 9-10 the contract or another contract made by or on behalf of the 9-11 principal; 9-12 (4) execute, acknowledge, seal, and deliver a deed, 9-13 revocation, mortgage, lease, notice, check, release, or other 9-14 instrument the agent considers desirable to accomplish a purpose of 9-15 a transaction; 9-16 (5) prosecute, defend, submit to arbitration, settle, 9-17 and propose or accept a compromise with respect to a claim existing 9-18 in favor of or against the principal or intervene in an action or 9-19 litigation relating to the claim; 9-20 (6) seek on the principal's behalf the assistance of a 9-21 court to carry out an act authorized by the power of attorney; 9-22 (7) engage, compensate, and discharge an attorney, 9-23 accountant, expert witness, or other assistant; 9-24 (8) keep appropriate records of each transaction, 9-25 including an accounting of receipts and disbursements; 9-26 (9) prepare, execute, and file a record, report, or 9-27 other document the attorney in fact or agent considers necessary or 10-1 desirable to safeguard or promote the principal's interest under a 10-2 statute or governmental regulation; 10-3 (10) reimburse the attorney in fact or agent for 10-4 expenditures made in exercising the powers granted by the durable 10-5 power of attorney; and 10-6 (11) in general, do any other lawful act that the 10-7 principal may do with respect to a transaction. 10-8 Sec. 492. CONSTRUCTION OF POWER RELATING TO REAL PROPERTY 10-9 TRANSACTIONS. In a statutory durable power of attorney, the 10-10 language conferring authority with respect to real property 10-11 transactions empowers the attorney in fact or agent to: 10-12 (1) accept as a gift or as security for a loan or 10-13 reject, demand, buy, lease, receive, or otherwise acquire an 10-14 interest in real property or a right incident to real property; 10-15 (2) sell, exchange, convey with or without covenants, 10-16 quitclaim, release, surrender, mortgage, encumber, partition, 10-17 consent to partitioning, subdivide, apply for zoning, rezoning, or 10-18 other governmental permits, plat or consent to platting, develop, 10-19 grant options concerning, lease or sublet, or otherwise dispose of 10-20 an estate or interest in real property or a right incident to real 10-21 property; 10-22 (3) release, assign, satisfy, and enforce by 10-23 litigation, action, or otherwise a mortgage, deed of trust, 10-24 encumbrance, lien, or other claim to real property that exists or 10-25 is claimed to exist; 10-26 (4) do any act of management or of conservation with 10-27 respect to an interest in real property, or a right incident to 11-1 real property, owned or claimed to be owned by the principal, 11-2 including power to: 11-3 (A) insure against a casualty, liability, or 11-4 loss; 11-5 (B) obtain or regain possession or protect the 11-6 interest or right by litigation, action, or otherwise; 11-7 (C) pay, compromise, or contest taxes or 11-8 assessments, or apply for and receive refunds in connection with 11-9 them; and 11-10 (D) purchase supplies, hire assistance or labor, 11-11 or make repairs or alterations in the real property; 11-12 (5) use, develop, alter, replace, remove, erect, or 11-13 install structures or other improvements on real property in which 11-14 the principal has, or claims to have, an estate, interest, or 11-15 right; 11-16 (6) participate in a reorganization with respect to 11-17 real property or a legal entity that owns an interest in or right 11-18 incident to real property and receive and hold shares of stock or 11-19 obligations received in a plan or reorganization, and act with 11-20 respect to the shares or obligations, including: 11-21 (A) selling or otherwise disposing of the shares 11-22 or obligations; 11-23 (B) exercising or selling an option, conversion, 11-24 or similar right with respect to the shares or obligations; and 11-25 (C) voting the shares or obligations in person 11-26 or by proxy; 11-27 (7) change the form of title of an interest in or 12-1 right incident to real property; and 12-2 (8) dedicate easements or other real property in which 12-3 the principal has, or claims to have, an interest to public use, 12-4 with or without consideration. 12-5 Sec. 493. CONSTRUCTION OF POWER RELATING TO TANGIBLE 12-6 PERSONAL PROPERTY TRANSACTIONS. In a statutory durable power of 12-7 attorney, the language conferring general authority with respect to 12-8 tangible personal property transactions empowers the attorney in 12-9 fact or agent to: 12-10 (1) accept as a gift or as security for a loan, 12-11 reject, demand, buy, receive, or otherwise acquire ownership or 12-12 possession of tangible personal property or an interest in tangible 12-13 personal property; 12-14 (2) sell, exchange, convey with or without covenants, 12-15 release, surrender, mortgage, encumber, pledge, hypothecate, create 12-16 a security interest in, pawn, grant options concerning, lease or 12-17 sublet to others, or otherwise dispose of tangible personal 12-18 property or an interest in tangible personal property; 12-19 (3) release, assign, satisfy, or enforce by 12-20 litigation, action, or otherwise a mortgage, security interest, 12-21 encumbrance, lien, or other claim on behalf of the principal, with 12-22 respect to tangible personal property or an interest in tangible 12-23 personal property; and 12-24 (4) do an act of management or conservation with 12-25 respect to tangible personal property or an interest in tangible 12-26 personal property on behalf of the principal, including: 12-27 (A) insuring against casualty, liability, or 13-1 loss; 13-2 (B) obtaining or regaining possession or 13-3 protecting the property or interest by litigation, action, or 13-4 otherwise; 13-5 (C) paying, compromising, or contesting taxes or 13-6 assessments or applying for and receiving refunds in connection 13-7 with taxes or assessments; 13-8 (D) moving from place to place; 13-9 (E) storing for hire or on a gratuitous 13-10 bailment; and 13-11 (F) using, altering, and making repairs or 13-12 alterations. 13-13 Sec. 494. CONSTRUCTION OF POWER RELATING TO STOCK AND BOND 13-14 TRANSACTIONS. In a statutory durable power of attorney, the 13-15 language conferring authority with respect to stock and bond 13-16 transactions empowers the attorney in fact or agent to buy, sell, 13-17 and exchange stocks, bonds, mutual funds, and all other types of 13-18 securities and financial instruments other than commodity futures 13-19 contracts and call and put options on stocks and stock indexes, 13-20 receive certificates and other evidences of ownership with respect 13-21 to securities, exercise voting rights with respect to securities in 13-22 person or by proxy, enter into voting trusts, and consent to 13-23 limitations on the right to vote. 13-24 Sec. 495. CONSTRUCTION OF POWER RELATING TO COMMODITY AND 13-25 OPTION TRANSACTIONS. In a statutory durable power of attorney, the 13-26 language conferring authority with respect to commodity and option 13-27 transactions empowers the attorney in fact or agent to buy, sell, 14-1 exchange, assign, settle, and exercise commodity futures contracts 14-2 and call and put options on stocks and stock indexes traded on a 14-3 regulated options exchange, and establish, continue, modify, or 14-4 terminate option accounts with a broker. 14-5 Sec. 496. CONSTRUCTION OF POWER RELATING TO BANKING AND 14-6 OTHER FINANCIAL INSTITUTION TRANSACTIONS. In a statutory durable 14-7 power of attorney, the language conferring authority with respect 14-8 to banking and other financial institution transactions empowers 14-9 the attorney in fact or agent to: 14-10 (1) continue, modify, or terminate an account or other 14-11 banking arrangement made by or on behalf of the principal; 14-12 (2) establish, modify, or terminate an account or 14-13 other banking arrangement with a bank, trust company, savings and 14-14 loan association, credit union, thrift company, brokerage firm, or 14-15 other financial institution selected by the attorney in fact or 14-16 agent; 14-17 (3) hire a safe deposit box or space in a vault; 14-18 (4) contract to procure other services available from 14-19 a financial institution as the attorney in fact or agent considers 14-20 desirable; 14-21 (5) withdraw by check, order, or otherwise money or 14-22 property of the principal deposited with or left in the custody of 14-23 a financial institution; 14-24 (6) receive bank statements, vouchers, notices, or 14-25 similar documents from a financial institution and act with respect 14-26 to them; 14-27 (7) enter a safe deposit box or vault and withdraw or 15-1 add to the contents; 15-2 (8) borrow money at an interest rate agreeable to the 15-3 attorney in fact or agent and pledge as security personal property 15-4 of the principal necessary to borrow, pay, renew, or extend the 15-5 time of payment of a debt of the principal; 15-6 (9) make, assign, draw, endorse, discount, guarantee, 15-7 and negotiate promissory notes, bills of exchange, checks, drafts, 15-8 or other negotiable or nonnegotiable paper of the principal, or 15-9 payable to the principal or the principal's order, to receive the 15-10 cash or other proceeds of those transactions, to accept a draft 15-11 drawn by a person on the principal, and pay the principal when due; 15-12 (10) receive for the principal and act on a sight 15-13 draft, warehouse receipt, or other negotiable or nonnegotiable 15-14 instrument; 15-15 (11) apply for and receive letters of credit, credit 15-16 cards, and traveler's checks from a financial institution and give 15-17 an indemnity or other agreement in connection with letters of 15-18 credit; and 15-19 (12) consent to an extension of the time of payment 15-20 with respect to commercial paper or a financial transaction with a 15-21 financial institution. 15-22 Sec. 497. CONSTRUCTION OF POWER RELATING TO BUSINESS 15-23 OPERATING TRANSACTIONS. In a statutory durable power of attorney, 15-24 the language conferring authority with respect to business 15-25 operating transactions empowers the attorney in fact or agent to: 15-26 (1) operate, buy, sell, enlarge, reduce, or terminate 15-27 a business interest; 16-1 (2) to the extent that an agent is permitted by law to 16-2 act for a principal and subject to the terms of the partnership 16-3 agreement: 16-4 (A) perform a duty or discharge a liability or 16-5 exercise a right, power, privilege, or option that the principal 16-6 has, may have, or claims to have, under a partnership agreement, 16-7 whether or not the principal is a general or limited partner; 16-8 (B) enforce the terms of a partnership agreement 16-9 by litigation, action, or otherwise; and 16-10 (C) defend, submit to arbitration, settle, or 16-11 compromise litigation or an action to which the principal is a 16-12 party because of membership in the partnership; 16-13 (3) exercise in person or by proxy or enforce by 16-14 litigation, action, or otherwise a right, power, privilege, or 16-15 option the principal has or claims to have as the holder of a bond, 16-16 share, or other instrument of similar character and defend, submit 16-17 to arbitration, settle, or compromise a legal proceeding to which 16-18 the principal is a party because of a bond, share, or similar 16-19 instrument; 16-20 (4) with respect to a business owned solely by the 16-21 principal: 16-22 (A) continue, modify, renegotiate, extend, and 16-23 terminate a contract made with an individual or a legal entity, 16-24 firm, association, or corporation by or on behalf of the principal 16-25 with respect to the business before execution of the power of 16-26 attorney; 16-27 (B) determine: 17-1 (i) the location of its operation; 17-2 (ii) the nature and extent of its 17-3 business; 17-4 (iii) the methods of manufacturing, 17-5 selling, merchandising, financing, accounting, and advertising 17-6 employed in its operation; 17-7 (iv) the amount and types of insurance 17-8 carried; and 17-9 (v) the mode of engaging, compensating, 17-10 and dealing with its accountants, attorneys, and other agents and 17-11 employees; 17-12 (C) change the name or form of organization 17-13 under which the business is operated and enter into a partnership 17-14 agreement with other persons or organize a corporation to take over 17-15 all or part of the operation of the business; and 17-16 (D) demand and receive money due or claimed by 17-17 the principal or on the principal's behalf in the operation of the 17-18 business and control and disburse the money in the operation of the 17-19 business; 17-20 (5) put additional capital into a business in which 17-21 the principal has an interest; 17-22 (6) join in a plan of reorganization, consolidation, 17-23 or merger of the business; 17-24 (7) sell or liquidate a business or part of it at the 17-25 time and on the terms that the attorney in fact or agent considers 17-26 desirable; 17-27 (8) establish the value of a business under a buy-out 18-1 agreement to which the principal is a party; 18-2 (9) prepare, sign, file, and deliver reports, 18-3 compilations of information, returns, or other papers with respect 18-4 to a business that are required by a governmental agency, 18-5 department, or instrumentality or that the attorney in fact or 18-6 agent considers desirable and make related payments; and 18-7 (10) pay, compromise, or contest taxes or assessments 18-8 and do any other act that the attorney in fact or agent considers 18-9 desirable to protect the principal from illegal or unnecessary 18-10 taxation, fines, penalties, or assessments with respect to a 18-11 business, including attempts to recover, in any manner permitted by 18-12 law, money paid before or after the execution of the power of 18-13 attorney. 18-14 Sec. 498. CONSTRUCTION OF POWER RELATING TO INSURANCE 18-15 TRANSACTIONS. In a statutory durable power of attorney, the 18-16 language conferring authority with respect to insurance and annuity 18-17 transactions empowers the attorney in fact or agent to: 18-18 (1) continue, pay the premium or assessment on, 18-19 modify, rescind, release, or terminate a contract procured by or on 18-20 behalf of the principal that insures or provides an annuity to 18-21 either the principal or another person, whether or not the 18-22 principal is a beneficiary under the contract; 18-23 (2) procure new, different, or additional contracts of 18-24 insurance and annuities for the principal or the principal's 18-25 spouse, children, and other dependents and select the amount, type 18-26 of insurance or annuity, and mode of payment; 18-27 (3) pay the premium or assessment on or modify, 19-1 rescind, release, or terminate a contract of insurance or annuity 19-2 procured by the attorney in fact or agent; 19-3 (4) designate the beneficiary of the contract, except 19-4 that an attorney in fact or agent may be named a beneficiary of the 19-5 contract or an extension, renewal, or substitute for the contract 19-6 only to the extent the attorney in fact or agent was named as a 19-7 beneficiary under a contract procured by the principal before 19-8 executing the power of attorney; 19-9 (5) apply for and receive a loan on the security of 19-10 the contract of insurance or annuity; 19-11 (6) surrender and receive the cash surrender value; 19-12 (7) exercise an election; 19-13 (8) change the manner of paying premiums; 19-14 (9) change or convert the type of insurance contract 19-15 or annuity with respect to which the principal has or claims to 19-16 have a power described in this section; 19-17 (10) change the beneficiary of a contract of insurance 19-18 or annuity, except that the attorney in fact or agent may be 19-19 designated a beneficiary only to the extent authorized by 19-20 Subdivision (4) of this section; 19-21 (11) apply for and procure government aid to guarantee 19-22 or pay premiums of a contract of insurance on the life of the 19-23 principal; 19-24 (12) collect, sell, assign, hypothecate, borrow on, or 19-25 pledge the interest of the principal in a contract of insurance or 19-26 annuity; and 19-27 (13) pay from proceeds or otherwise, compromise or 20-1 contest, or apply for refunds in connection with a tax or 20-2 assessment levied by a taxing authority with respect to a contract 20-3 of insurance or annuity or its proceeds or liability accruing 20-4 because of the tax or assessment. 20-5 Sec. 499. CONSTRUCTION OF POWER RELATING TO ESTATE, TRUST, 20-6 AND OTHER BENEFICIARY TRANSACTIONS. In a statutory durable power 20-7 of attorney, the language conferring authority with respect to 20-8 estate, trust, and other beneficiary transactions empowers the 20-9 attorney in fact or agent to act for the principal in all matters 20-10 that affect a trust, probate estate, guardianship, conservatorship, 20-11 escrow, custodianship, or other fund from which the principal is, 20-12 may become, or claims to be entitled, as a beneficiary, to a share 20-13 or payment, including to: 20-14 (1) accept, reject, disclaim, receive, receipt for, 20-15 sell, assign, release, pledge, exchange, or consent to a reduction 20-16 in or modification of a share in or payment from the fund; 20-17 (2) demand or obtain by litigation, action, or 20-18 otherwise money or any other thing of value to which the principal 20-19 is, may become, or claims to be entitled because of the fund; 20-20 (3) initiate, participate in, or oppose a legal or 20-21 judicial proceeding to ascertain the meaning, validity, or effect 20-22 of a deed, will, declaration of trust, or other instrument or 20-23 transaction affecting the interest of the principal; 20-24 (4) initiate, participate in, or oppose a legal or 20-25 judicial proceeding to remove, substitute, or surcharge a 20-26 fiduciary; 20-27 (5) conserve, invest, disburse, or use anything 21-1 received for an authorized purpose; and 21-2 (6) transfer all or part of an interest of the 21-3 principal in real property, stocks, bonds, accounts with financial 21-4 institutions, insurance, and other property to the trustee of a 21-5 revocable trust created by the principal as settlor. 21-6 Sec. 500. CONSTRUCTION OF POWER RELATING TO CLAIMS AND 21-7 LITIGATION. In a statutory durable power of attorney, the language 21-8 conferring general authority with respect to claims and litigation 21-9 empowers the attorney in fact or agent to: 21-10 (1) assert and prosecute before a court or 21-11 administrative agency a claim, a claim for relief, a counterclaim, 21-12 or an offset, or defend against an individual, a legal entity, or a 21-13 government, including suits to recover property or other thing of 21-14 value, to recover damages sustained by the principal, to eliminate 21-15 or modify tax liability, or to seek an injunction, specific 21-16 performance, or other relief; 21-17 (2) bring an action to determine adverse claims, 21-18 intervene in an action or litigation, and act as amicus curiae; 21-19 (3) in connection with an action or litigation, 21-20 procure an attachment, garnishment, libel, order of arrest, or 21-21 other preliminary, provisional, or intermediate relief and use an 21-22 available procedure to effect or satisfy a judgment, order, or 21-23 decree; 21-24 (4) in connection with an action or litigation, 21-25 perform any lawful act the principal could perform, including 21-26 acceptance of tender, offer of judgment, admission of facts, 21-27 submission of a controversy on an agreed statement of facts, 22-1 consent to examination before trial, and binding of the principal 22-2 in litigation; 22-3 (5) submit to arbitration, settle, and propose or 22-4 accept a compromise with respect to a claim or litigation; 22-5 (6) waive the issuance and service of process on the 22-6 principal, accept service of process, appear for the principal, 22-7 designate persons on whom process directed to the principal may be 22-8 served, execute and file or deliver stipulations on the principal's 22-9 behalf, verify pleadings, seek appellate review, procure and give 22-10 surety and indemnity bonds, contract and pay for the preparation 22-11 and printing of records and briefs, receive and execute and file or 22-12 deliver a consent, waiver, release, confession of judgment, 22-13 satisfaction of judgment, notice, agreement, or other instrument in 22-14 connection with the prosecution, settlement, or defense of a claim 22-15 or litigation; 22-16 (7) act for the principal with respect to bankruptcy 22-17 or insolvency proceedings, whether voluntary or involuntary, 22-18 concerning the principal or some other person, with respect to a 22-19 reorganization proceeding or a receivership or application for the 22-20 appointment of a receiver or trustee that affects an interest of 22-21 the principal in real or personal property or other thing of value; 22-22 and 22-23 (8) pay a judgment against the principal or a 22-24 settlement made in connection with a claim or litigation and 22-25 receive and conserve money or other thing of value paid in 22-26 settlement of or as proceeds of a claim or litigation. 22-27 Sec. 501. CONSTRUCTION OF POWER RELATING TO PERSONAL AND 23-1 FAMILY MAINTENANCE. In a statutory durable power of attorney, the 23-2 language conferring authority with respect to personal and family 23-3 maintenance empowers the attorney in fact or agent to: 23-4 (1) perform the acts necessary to maintain the 23-5 customary standard of living of the principal, the principal's 23-6 spouse and children, and other individuals customarily or legally 23-7 entitled to be supported by the principal, including providing 23-8 living quarters by purchase, lease, or other contract, or paying 23-9 the operating costs, including interest, amortization payments, 23-10 repairs, and taxes on premises owned by the principal and occupied 23-11 by those individuals; 23-12 (2) provide for the individuals described by 23-13 Subdivision (1) of this section normal domestic help, usual 23-14 vacations and travel expenses, and funds for shelter, clothing, 23-15 food, appropriate education, and other current living costs; 23-16 (3) pay necessary medical, dental, and surgical care, 23-17 hospitalization, and custodial care for the individuals described 23-18 by Subdivision (1) of this section; 23-19 (4) continue any provision made by the principal, for 23-20 the individuals described by Subdivision (1) of this section, for 23-21 automobiles or other means of transportation, including 23-22 registering, licensing, insuring, and replacing the automobiles or 23-23 other means of transportation; 23-24 (5) maintain or open charge accounts for the 23-25 convenience of the individuals described by Subdivision (1) of this 23-26 section and open new accounts the attorney in fact or agent 23-27 considers desirable to accomplish a lawful purpose; and 24-1 (6) continue payments incidental to the membership or 24-2 affiliation of the principal in a church, club, society, order, or 24-3 other organization or to continue contributions to those 24-4 organizations. 24-5 Sec. 502. CONSTRUCTION OF POWER RELATING TO BENEFITS FROM 24-6 CERTAIN GOVERNMENTAL PROGRAMS OR CIVIL OR MILITARY SERVICE. In a 24-7 statutory durable power of attorney, the language conferring 24-8 authority with respect to benefits from social security, Medicare, 24-9 Medicaid, or other governmental programs or civil or military 24-10 service empowers the attorney in fact or agent to: 24-11 (1) execute vouchers in the name of the principal for 24-12 allowances and reimbursements payable by the United States, a 24-13 foreign government, or a state or subdivision of a state to the 24-14 principal, including allowances and reimbursements for 24-15 transportation of the individuals described by Section 501(1) of 24-16 this code, and for shipment of their household effects; 24-17 (2) take possession and order the removal and shipment 24-18 of property of the principal from a post, warehouse, depot, dock, 24-19 or other place of storage or safekeeping, either governmental or 24-20 private, and execute and deliver a release, voucher, receipt, bill 24-21 of lading, shipping ticket, certificate, or other instrument for 24-22 that purpose; 24-23 (3) prepare, file, and prosecute a claim of the 24-24 principal to a benefit or assistance, financial or otherwise, to 24-25 which the principal claims to be entitled, under a statute or 24-26 governmental regulation; 24-27 (4) prosecute, defend, submit to arbitration, settle, 25-1 and propose or accept a compromise with respect to any benefits the 25-2 principal may be entitled to receive; and 25-3 (5) receive the financial proceeds of a claim of the 25-4 type described in this section and conserve, invest, disburse, or 25-5 use anything received for a lawful purpose. 25-6 Sec. 503. CONSTRUCTION OF POWER RELATING TO RETIREMENT PLAN 25-7 TRANSACTIONS. In a statutory durable power of attorney, the 25-8 language conferring authority with respect to retirement plan 25-9 transactions empowers the attorney in fact or agent to do any 25-10 lawful act the principal may do with respect to a transaction 25-11 relating to a retirement plan, including to: 25-12 (1) apply for service or disability retirement 25-13 benefits; 25-14 (2) select payment options under any retirement plan 25-15 in which the principal participates, including plans for 25-16 self-employed individuals; 25-17 (3) designate or change the designation of a 25-18 beneficiary or benefits payable by a retirement plan, except that 25-19 an attorney in fact or agent may be named a beneficiary only to the 25-20 extent the attorney in fact or agent was a named beneficiary under 25-21 the retirement plan before the durable power of attorney was 25-22 executed; 25-23 (4) make voluntary contributions to retirement plans 25-24 if authorized by the plan; 25-25 (5) exercise the investment powers available under any 25-26 self-directed retirement plan; 25-27 (6) make "rollovers" of plan benefits into other 26-1 retirement plans; 26-2 (7) borrow from, sell assets to, and purchase assets 26-3 from retirement plans if authorized by the plan; 26-4 (8) waive the right of the principal to be a 26-5 beneficiary of a joint or survivor annuity if the principal is a 26-6 spouse who is not employed; 26-7 (9) receive, endorse, and cash payments from a 26-8 retirement plan; 26-9 (10) waive the right of the principal to receive all 26-10 or a portion of benefits payable by a retirement plan; and 26-11 (11) request and receive information relating to the 26-12 principal from retirement plan records. 26-13 Sec. 504. CONSTRUCTION OF POWER RELATING TO TAX MATTERS. In 26-14 a statutory durable power of attorney, the language conferring 26-15 authority with respect to tax matters empowers the attorney in fact 26-16 or agent to: 26-17 (1) prepare, sign, and file federal, state, local, and 26-18 foreign income, gift, payroll, Federal Insurance Contributions Act, 26-19 and other tax returns, claims for refunds, requests for extension 26-20 of time, petitions regarding tax matters, and any other tax-related 26-21 documents, including receipts, offers, waivers, consents, including 26-22 consents and agreements under Section 2032A, Internal Revenue Code 26-23 of 1986, closing agreements, and any power of attorney form 26-24 required by the Internal Revenue Service or other taxing authority 26-25 with respect to a tax year on which the statute of limitations has 26-26 not run and 25 tax years following that tax year; 26-27 (2) pay taxes due, collect refunds, post bonds, 27-1 receive confidential information, and contest deficiencies 27-2 determined by the Internal Revenue Service or other taxing 27-3 authority; 27-4 (3) exercise any election available to the principal 27-5 under federal, state, local, or foreign tax law; and 27-6 (4) act for the principal in all tax matters for all 27-7 periods before the Internal Revenue Service and any other taxing 27-8 authority. 27-9 Sec. 505. EXISTING INTEREST; FOREIGN INTERESTS. The powers 27-10 described in Sections 492 through 504 of this code may be exercised 27-11 equally with respect to an interest the principal has at the time 27-12 the durable power of attorney is executed or acquires later, 27-13 whether or not the property is located in this state and whether or 27-14 not the powers are exercised or the durable power of attorney is 27-15 executed in this state. 27-16 Sec. 506. UNIFORMITY OF APPLICATION AND CONSTRUCTION. This 27-17 chapter shall be applied and construed to effect its general 27-18 purpose to make uniform the law with respect to the subject of this 27-19 chapter among states enacting it. 27-20 SECTION 2. Section 36A, Probate Code, is repealed. A power 27-21 of attorney executed in compliance with that section before the 27-22 effective date of this Act is valid according to the terms of that 27-23 section as it existed at the time of the execution, and that 27-24 section is continued in effect for that purpose. 27-25 SECTION 3. This Act takes effect September 1, 1993. 27-26 SECTION 4. The importance of this legislation and the 27-27 crowded condition of the calendars in both houses create an 28-1 emergency and an imperative public necessity that the 28-2 constitutional rule requiring bills to be read on three several 28-3 days in each house be suspended, and this rule is hereby suspended.