1-1 By: Parker S.B. No. 176
1-2 (In the Senate - Filed January 26, 1993; January 27, 1993,
1-3 read first time and referred to Committee on Jurisprudence;
1-4 February 9, 1993, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0;
1-6 February 9, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Henderson x
1-10 Harris of Tarrant x
1-11 Brown x
1-12 Harris of Dallas x
1-13 Luna x
1-14 Parker x
1-15 West x
1-16 COMMITTEE SUBSTITUTE FOR S.B. No. 176 By: Parker
1-17 A BILL TO BE ENTITLED
1-18 AN ACT
1-19 relating to the adoption of the Durable Power of Attorney Act.
1-20 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-21 SECTION 1. The Texas Probate Code is amended by adding
1-22 Chapter XII to read as follows:
1-23 CHAPTER XII. DURABLE POWER OF ATTORNEY ACT
1-24 Sec. 481. SHORT TITLE. This chapter may be cited as the
1-25 Durable Power of Attorney Act.
1-26 Sec. 482. DEFINITION. A "durable power of attorney" means a
1-27 written instrument that:
1-28 (1) designates another person as attorney in fact or
1-29 agent;
1-30 (2) is signed by an adult principal;
1-31 (3) contains the words "This power of attorney is not
1-32 affected by subsequent disability or incapacity of the principal,"
1-33 or "This power of attorney becomes effective on the disability or
1-34 incapacity of the principal," or similar words showing the
1-35 principal's intent that the authority conferred on the attorney in
1-36 fact or agent shall be exercised notwithstanding the principal's
1-37 subsequent disability or incapacity; and
1-38 (4) is acknowledged by the principal before an officer
1-39 authorized to take acknowledgments to deeds of conveyance and to
1-40 administer oaths under the laws of this state or any other state.
1-41 Sec. 483. DURATION. A durable power of attorney does not
1-42 lapse because of the passage of time unless the instrument creating
1-43 the power of attorney specifically states a time limitation.
1-44 Sec. 484. EFFECT OF ACTS BY ATTORNEY IN FACT OR AGENT DURING
1-45 INCAPACITY OF PRINCIPAL. All acts done by an attorney in fact or
1-46 agent pursuant to a durable power of attorney during any period of
1-47 disability or incapacity of the principal have the same effect and
1-48 inure to the benefit of and bind the principal and the principal's
1-49 successors in interest as if the principal were not disabled or
1-50 incapacitated.
1-51 Sec. 485. RELATION OF ATTORNEY IN FACT OR AGENT TO
1-52 COURT-APPOINTED GUARDIAN OF ESTATE. If, after execution of a
1-53 durable power of attorney, a court of the principal's domicile
1-54 appoints a guardian of the estate of the principal, the powers of
1-55 the attorney in fact or agent terminate on the qualification of the
1-56 guardian of the estate, and the attorney in fact or agent shall
1-57 deliver to the guardian of the estate all assets of the estate of
1-58 the ward in the attorney's or agent's possession and shall account
1-59 to the guardian of the estate as the attorney or agent would to the
1-60 principal had the principal terminated his powers.
1-61 Sec. 486. KNOWLEDGE OF DEATH, GUARDIAN OF ESTATE, OR
1-62 REVOCATION; GOOD-FAITH ACTS. The revocation by, the death of, or
1-63 the qualification of a guardian of the estate of a principal who
1-64 has executed a durable power of attorney does not revoke or
1-65 terminate the agency as to the attorney in fact, agent, or other
1-66 person who, without actual knowledge of the termination of the
1-67 power by revocation, by the principal's death, or by the
1-68 qualification of a guardian of the estate of the principal, acts in
2-1 good faith under or in reliance on the power. Any action so taken,
2-2 unless otherwise invalid or unenforceable, binds successors in
2-3 interest of the principal.
2-4 Sec. 487. AFFIDAVIT OF LACK OF KNOWLEDGE OR TERMINATION OF
2-5 POWER; RECORDING. (a) As to acts undertaken in good-faith
2-6 reliance on the durable power of attorney, an affidavit executed by
2-7 the attorney in fact or agent under a durable power of attorney
2-8 stating that the attorney in fact or agent did not have at the time
2-9 of exercise of the power actual knowledge of the termination of the
2-10 power by revocation, by the principal's death, or by the
2-11 qualification of a guardian of the estate of the principal is
2-12 conclusive proof as between the attorney in fact or agent and a
2-13 person other than the principal or the principal's personal
2-14 representative dealing with the attorney in fact or agent of the
2-15 nonrevocation or nontermination of the power at that time.
2-16 (b) As to acts undertaken in good-faith reliance on the
2-17 durable power of attorney, an affidavit executed by the attorney in
2-18 fact or agent under a durable power of attorney stating that the
2-19 principal is disabled or incapacitated, as defined by the power, is
2-20 conclusive proof as between the attorney in fact or agent and a
2-21 person other than the principal or the principal's personal
2-22 representative dealing with the attorney in fact or agent of the
2-23 disability or incapacity of the principal at that time.
2-24 (c) If the exercise of the power of attorney requires
2-25 execution and delivery of any instrument that is to be recorded, an
2-26 affidavit executed under Subsection (a) or (b) of this section,
2-27 when authenticated for record, may also be recorded.
2-28 (d) This section does not affect any provision in a durable
2-29 power of attorney for its termination by expiration of time or
2-30 occurrence of an event other than express revocation.
2-31 Sec. 488. REVOCATION OF DURABLE POWER OF ATTORNEY. Unless
2-32 otherwise provided by the durable power of attorney, a revocation
2-33 of a durable power of attorney is not effective as to a third party
2-34 relying on the power of attorney until the third party receives
2-35 actual notice of the revocation.
2-36 Sec. 489. RECORDING DURABLE POWER OF ATTORNEY FOR REAL
2-37 PROPERTY TRANSACTIONS. A durable power of attorney for a real
2-38 property transaction requiring the execution and delivery of an
2-39 instrument that is to be recorded, including a release, assignment,
2-40 satisfaction, mortgage, security agreement, deed of trust,
2-41 encumbrance, deed of conveyance, oil, gas, or other mineral lease,
2-42 memorandum of a lease, lien, or other claim or right to real
2-43 property, shall be recorded in the office of the county clerk of
2-44 the county in which the property is located.
2-45 Sec. 490. STATUTORY DURABLE POWER OF ATTORNEY. (a) The
2-46 following form is known as a "statutory durable power of attorney."
2-47 A person may use a statutory durable power of attorney to grant an
2-48 attorney in fact or agent powers with respect to a person's
2-49 property and financial matters. A power of attorney in
2-50 substantially the following form has the meaning and effect
2-51 prescribed by this chapter. The validity of a power of attorney as
2-52 meeting the requirements of a statutory durable power of attorney
2-53 is not affected by the fact that one or more of the categories of
2-54 optional powers listed in the form are struck or the form includes
2-55 specific limitations on or additions to the attorney in fact's or
2-56 agent's powers.
2-57 When a power in substantially the form set forth in this
2-58 chapter is used, third parties who rely in good faith on the acts
2-59 of the agent within the scope of the power may do so without fear
2-60 of liability to the principal.
2-61 The following form is not exclusive, and other forms of power
2-62 of attorney may be used.
2-63 STATUTORY DURABLE POWER OF ATTORNEY
2-64 NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND
2-65 SWEEPING. THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT,
2-66 CHAPTER XII, TEXAS PROBATE CODE. IF YOU HAVE ANY QUESTIONS ABOUT
2-67 THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES
2-68 NOT AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE
2-69 DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU
2-70 LATER WISH TO DO SO.
3-1 I, (insert your name and address),
3-2 appoint (insert the name and address of
3-3 the person appointed) as my agent (attorney-in-fact) to act for me
3-4 in any lawful way with respect to the following initialed subjects:
3-5 TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN
3-6 FRONT OF (N) AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS.
3-7 TO GRANT ONE OR MORE, BUT FEWER THAN ALL, OF THE FOLLOWING
3-8 POWERS, INITIAL THE LINE IN FRONT OF EACH POWER YOU ARE GRANTING.
3-9 TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF IT.
3-10 YOU MAY, BUT NEED NOT, CROSS OUT EACH POWER WITHHELD.
3-11 INITIAL
3-12 (A) real property transactions;
3-13 (B) tangible personal property transactions;
3-14 (C) stock and bond transactions;
3-15 (D) commodity and option transactions;
3-16 (E) banking and other financial institution
3-17 transactions;
3-18 (F) business operating transactions;
3-19 (G) insurance and annuity transactions;
3-20 (H) estate, trust, and other beneficiary transactions;
3-21 (I) claims and litigation;
3-22 (J) personal and family maintenance;
3-23 (K) benefits from social security, Medicare, Medicaid,
3-24 or other governmental programs or civil or military
3-25 service;
3-26 (L) retirement plan transactions;
3-27 (M) tax matters;
3-28 (N) ALL OF THE POWERS LISTED IN (A) THROUGH (M). YOU
3-29 NEED NOT INITIAL ANY OTHER LINES IF YOU INITIAL LINE
3-30 (N).
3-31 SPECIAL INSTRUCTIONS:
3-32 ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS
3-33 LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.
3-34 ___________________________________________________________________
3-35 ___________________________________________________________________
3-36 ___________________________________________________________________
3-37 ___________________________________________________________________
3-38 ___________________________________________________________________
3-39 ___________________________________________________________________
3-40 ___________________________________________________________________
3-41 ___________________________________________________________________
3-42 ___________________________________________________________________
3-43 ___________________________________________________________________
3-44 UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS
3-45 EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.
3-46 CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE
3-47 ALTERNATIVE NOT CHOSEN:
3-48 (A) This power of attorney is not affected by my
3-49 subsequent disability or incapacity.
3-50 (B) This power of attorney becomes effective upon my
3-51 disability or incapacity.
3-52 YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY
3-53 IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.
3-54 IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED
3-55 THAT YOU CHOSE ALTERNATIVE (A).
3-56 I agree that any third party who receives a copy of this
3-57 document may act under it. Revocation of the durable power of
3-58 attorney is not effective as to a third party until the third party
3-59 receives actual notice of the revocation. I agree to indemnify the
3-60 third party for any claims that arise against the third party
3-61 because of reliance on this power of attorney.
3-62 If any agent named by me dies, becomes legally disabled,
3-63 resigns, or refuses to act, I name the following (each to act alone
3-64 and successively, in the order named) as successor(s) to that
3-65 agent: .
3-66 Signed this ____________ day of ______________________, 19___
3-67 __________________________________
3-68 (your signature)
3-69 State of ____________________
3-70 County of ___________________
4-1 This document was acknowledged before me on
4-2 _______________________ (date) by _________________________________
4-3 (name of principal)
4-4 _________________________________
4-5 (signature of notarial officer)
4-6 (Seal, if any, of
4-7 notary) _________________________________
4-8 (printed name)
4-9 My commission expires: _________
4-10 THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR ACTING UNDER
4-11 THE APPOINTMENT, ASSUMES THE FIDUCIARY AND OTHER LEGAL
4-12 RESPONSIBILITIES OF AN AGENT.
4-13 (b) A statutory durable power of attorney is legally
4-14 sufficient under this chapter if the wording of the form complies
4-15 substantially with Subsection (a) of this section, the form is
4-16 properly completed, and the signature of the principal is
4-17 acknowledged.
4-18 (c) If the line in front of (N) of the form under Subsection
4-19 (a) of this section is initialed, an initial on the line in front
4-20 of any other power does not limit the powers granted by line (N).
4-21 Sec. 491. CONSTRUCTION OF POWERS GENERALLY. The principal,
4-22 by executing a statutory durable power of attorney that confers
4-23 authority with respect to any class of transactions, empowers the
4-24 attorney in fact or agent for that class of transactions to:
4-25 (1) demand, receive, and obtain by litigation, action,
4-26 or otherwise any money or other thing of value to which the
4-27 principal is, may become, or may claim to be entitled;
4-28 (2) conserve, invest, disburse, or use any money or
4-29 other thing of value received on behalf of the principal for the
4-30 purposes intended;
4-31 (3) contract in any manner with any person, on terms
4-32 agreeable to the attorney in fact or agent, to accomplish a purpose
4-33 of a transaction and perform, rescind, reform, release, or modify
4-34 the contract or another contract made by or on behalf of the
4-35 principal;
4-36 (4) execute, acknowledge, seal, and deliver a deed,
4-37 revocation, mortgage, lease, notice, check, release, or other
4-38 instrument the agent considers desirable to accomplish a purpose of
4-39 a transaction;
4-40 (5) prosecute, defend, submit to arbitration, settle,
4-41 and propose or accept a compromise with respect to a claim existing
4-42 in favor of or against the principal or intervene in an action or
4-43 litigation relating to the claim;
4-44 (6) seek on the principal's behalf the assistance of a
4-45 court to carry out an act authorized by the power of attorney;
4-46 (7) engage, compensate, and discharge an attorney,
4-47 accountant, expert witness, or other assistant;
4-48 (8) keep appropriate records of each transaction,
4-49 including an accounting of receipts and disbursements;
4-50 (9) prepare, execute, and file a record, report, or
4-51 other document the attorney in fact or agent considers necessary or
4-52 desirable to safeguard or promote the principal's interest under a
4-53 statute or governmental regulation;
4-54 (10) reimburse the attorney in fact or agent for
4-55 expenditures made in exercising the powers granted by the durable
4-56 power of attorney; and
4-57 (11) in general, do any other lawful act that the
4-58 principal may do with respect to a transaction.
4-59 Sec. 492. CONSTRUCTION OF POWER RELATING TO REAL PROPERTY
4-60 TRANSACTIONS. In a statutory durable power of attorney, the
4-61 language conferring authority with respect to real property
4-62 transactions empowers the attorney in fact or agent to:
4-63 (1) accept as a gift or as security for a loan or
4-64 reject, demand, buy, lease, receive, or otherwise acquire an
4-65 interest in real property or a right incident to real property;
4-66 (2) sell, exchange, convey with or without covenants,
4-67 quitclaim, release, surrender, mortgage, encumber, partition,
4-68 consent to partitioning, subdivide, apply for zoning, rezoning, or
4-69 other governmental permits, plat or consent to platting, develop,
4-70 grant options concerning, lease or sublet, or otherwise dispose of
5-1 an estate or interest in real property or a right incident to real
5-2 property;
5-3 (3) release, assign, satisfy, and enforce by
5-4 litigation, action, or otherwise a mortgage, deed of trust,
5-5 encumbrance, lien, or other claim to real property that exists or
5-6 is claimed to exist;
5-7 (4) do any act of management or of conservation with
5-8 respect to an interest in real property, or a right incident to
5-9 real property, owned or claimed to be owned by the principal,
5-10 including power to:
5-11 (A) insure against a casualty, liability, or
5-12 loss;
5-13 (B) obtain or regain possession or protect the
5-14 interest or right by litigation, action, or otherwise;
5-15 (C) pay, compromise, or contest taxes or
5-16 assessments or apply for and receive refunds in connection with
5-17 them; and
5-18 (D) purchase supplies, hire assistance or labor,
5-19 or make repairs or alterations in the real property;
5-20 (5) use, develop, alter, replace, remove, erect, or
5-21 install structures or other improvements on real property in which
5-22 the principal has or claims to have an estate, interest, or right;
5-23 (6) participate in a reorganization with respect to
5-24 real property or a legal entity that owns an interest in or right
5-25 incident to real property, receive and hold shares of stock or
5-26 obligations received in a plan or reorganization, and act with
5-27 respect to the shares or obligations, including:
5-28 (A) selling or otherwise disposing of the shares
5-29 or obligations;
5-30 (B) exercising or selling an option, conversion,
5-31 or similar right with respect to the shares or obligations; and
5-32 (C) voting the shares or obligations in person
5-33 or by proxy;
5-34 (7) change the form of title of an interest in or
5-35 right incident to real property; and
5-36 (8) dedicate easements or other real property in which
5-37 the principal has or claims to have an interest to public use, with
5-38 or without consideration.
5-39 Sec. 493. CONSTRUCTION OF POWER RELATING TO TANGIBLE
5-40 PERSONAL PROPERTY TRANSACTIONS. In a statutory durable power of
5-41 attorney, the language conferring general authority with respect to
5-42 tangible personal property transactions empowers the attorney in
5-43 fact or agent to:
5-44 (1) accept as a gift or as security for a loan,
5-45 reject, demand, buy, receive, or otherwise acquire ownership or
5-46 possession of tangible personal property or an interest in tangible
5-47 personal property;
5-48 (2) sell, exchange, convey with or without covenants,
5-49 release, surrender, mortgage, encumber, pledge, hypothecate, create
5-50 a security interest in, pawn, grant options concerning, lease or
5-51 sublet to others, or otherwise dispose of tangible personal
5-52 property or an interest in tangible personal property;
5-53 (3) release, assign, satisfy, or enforce by
5-54 litigation, action, or otherwise a mortgage, security interest,
5-55 encumbrance, lien, or other claim on behalf of the principal, with
5-56 respect to tangible personal property or an interest in tangible
5-57 personal property; and
5-58 (4) do an act of management or conservation with
5-59 respect to tangible personal property or an interest in tangible
5-60 personal property on behalf of the principal, including:
5-61 (A) insuring against casualty, liability, or
5-62 loss;
5-63 (B) obtaining or regaining possession or
5-64 protecting the property or interest by litigation, action, or
5-65 otherwise;
5-66 (C) paying, compromising, or contesting taxes or
5-67 assessments or applying for and receiving refunds in connection
5-68 with taxes or assessments;
5-69 (D) moving from place to place;
5-70 (E) storing for hire or on a gratuitous
6-1 bailment; and
6-2 (F) using, altering, and making repairs or
6-3 alterations.
6-4 Sec. 494. CONSTRUCTION OF POWER RELATING TO STOCK AND BOND
6-5 TRANSACTIONS. In a statutory durable power of attorney, the
6-6 language conferring authority with respect to stock and bond
6-7 transactions empowers the attorney in fact or agent to buy, sell,
6-8 and exchange stocks, bonds, mutual funds, and all other types of
6-9 securities and financial instruments other than commodity futures
6-10 contracts and call and put options on stocks and stock indexes,
6-11 receive certificates and other evidences of ownership with respect
6-12 to securities, exercise voting rights with respect to securities in
6-13 person or by proxy, enter into voting trusts, and consent to
6-14 limitations on the right to vote.
6-15 Sec. 495. CONSTRUCTION OF POWER RELATING TO COMMODITY AND
6-16 OPTION TRANSACTIONS. In a statutory durable power of attorney, the
6-17 language conferring authority with respect to commodity and option
6-18 transactions empowers the attorney in fact or agent to buy, sell,
6-19 exchange, assign, settle, and exercise commodity futures contracts
6-20 and call and put options on stocks and stock indexes traded on a
6-21 regulated options exchange and establish, continue, modify, or
6-22 terminate option accounts with a broker.
6-23 Sec. 496. CONSTRUCTION OF POWER RELATING TO BANKING AND
6-24 OTHER FINANCIAL INSTITUTION TRANSACTIONS. In a statutory durable
6-25 power of attorney, the language conferring authority with respect
6-26 to banking and other financial institution transactions empowers
6-27 the attorney in fact or agent to:
6-28 (1) continue, modify, or terminate an account or other
6-29 banking arrangement made by or on behalf of the principal;
6-30 (2) establish, modify, or terminate an account or
6-31 other banking arrangement with a bank, trust company, savings and
6-32 loan association, credit union, thrift company, brokerage firm, or
6-33 other financial institution selected by the attorney in fact or
6-34 agent;
6-35 (3) hire a safe deposit box or space in a vault;
6-36 (4) contract to procure other services available from
6-37 a financial institution as the attorney in fact or agent considers
6-38 desirable;
6-39 (5) withdraw by check, order, or otherwise money or
6-40 property of the principal deposited with or left in the custody of
6-41 a financial institution;
6-42 (6) receive bank statements, vouchers, notices, or
6-43 similar documents from a financial institution and act with respect
6-44 to them;
6-45 (7) enter a safe deposit box or vault and withdraw or
6-46 add to the contents;
6-47 (8) borrow money at an interest rate agreeable to the
6-48 attorney in fact or agent and pledge as security real or personal
6-49 property of the principal necessary to borrow, pay, renew, or
6-50 extend the time of payment of a debt of the principal;
6-51 (9) make, assign, draw, endorse, discount, guarantee,
6-52 and negotiate promissory notes, bills of exchange, checks, drafts,
6-53 or other negotiable or nonnegotiable paper of the principal, or
6-54 payable to the principal or the principal's order, to receive the
6-55 cash or other proceeds of those transactions, to accept a draft
6-56 drawn by a person on the principal, and to pay the principal when
6-57 due;
6-58 (10) receive for the principal and act on a sight
6-59 draft, warehouse receipt, or other negotiable or nonnegotiable
6-60 instrument;
6-61 (11) apply for and receive letters of credit, credit
6-62 cards, and traveler's checks from a financial institution and give
6-63 an indemnity or other agreement in connection with letters of
6-64 credit; and
6-65 (12) consent to an extension of the time of payment
6-66 with respect to commercial paper or a financial transaction with a
6-67 financial institution.
6-68 Sec. 497. CONSTRUCTION OF POWER RELATING TO BUSINESS
6-69 OPERATING TRANSACTIONS. In a statutory durable power of attorney,
6-70 the language conferring authority with respect to business
7-1 operating transactions empowers the attorney in fact or agent to:
7-2 (1) operate, buy, sell, enlarge, reduce, or terminate
7-3 a business interest;
7-4 (2) to the extent that an agent is permitted by law to
7-5 act for a principal and subject to the terms of the partnership
7-6 agreement:
7-7 (A) perform a duty or discharge a liability or
7-8 exercise a right, power, privilege, or option that the principal
7-9 has, may have, or claims to have under a partnership agreement,
7-10 whether or not the principal is a general or limited partner;
7-11 (B) enforce the terms of a partnership agreement
7-12 by litigation, action, or otherwise; and
7-13 (C) defend, submit to arbitration, settle, or
7-14 compromise litigation or an action to which the principal is a
7-15 party because of membership in the partnership;
7-16 (3) exercise in person or by proxy or enforce by
7-17 litigation, action, or otherwise a right, power, privilege, or
7-18 option the principal has or claims to have as the holder of a bond,
7-19 share, or other instrument of similar character and defend, submit
7-20 to arbitration, settle, or compromise a legal proceeding to which
7-21 the principal is a party because of a bond, share, or similar
7-22 instrument;
7-23 (4) with respect to a business owned solely by the
7-24 principal:
7-25 (A) continue, modify, renegotiate, extend, and
7-26 terminate a contract made with an individual or a legal entity,
7-27 firm, association, or corporation by or on behalf of the principal
7-28 with respect to the business before execution of the power of
7-29 attorney;
7-30 (B) determine:
7-31 (i) the location of its operation;
7-32 (ii) the nature and extent of its
7-33 business;
7-34 (iii) the methods of manufacturing,
7-35 selling, merchandising, financing, accounting, and advertising
7-36 employed in its operation;
7-37 (iv) the amount and types of insurance
7-38 carried; and
7-39 (v) the mode of engaging, compensating,
7-40 and dealing with its accountants, attorneys, and other agents and
7-41 employees;
7-42 (C) change the name or form of organization
7-43 under which the business is operated and enter into a partnership
7-44 agreement with other persons or organize a corporation to take over
7-45 all or part of the operation of the business; and
7-46 (D) demand and receive money due or claimed by
7-47 the principal or on the principal's behalf in the operation of the
7-48 business and control and disburse the money in the operation of the
7-49 business;
7-50 (5) put additional capital into a business in which
7-51 the principal has an interest;
7-52 (6) join in a plan of reorganization, consolidation,
7-53 or merger of the business;
7-54 (7) sell or liquidate a business or part of it at the
7-55 time and on the terms that the attorney in fact or agent considers
7-56 desirable;
7-57 (8) establish the value of a business under a buy-out
7-58 agreement to which the principal is a party;
7-59 (9) prepare, sign, file, and deliver reports,
7-60 compilations of information, returns, or other papers with respect
7-61 to a business that are required by a governmental agency,
7-62 department, or instrumentality or that the attorney in fact or
7-63 agent considers desirable and make related payments; and
7-64 (10) pay, compromise, or contest taxes or assessments
7-65 and do any other act that the attorney in fact or agent considers
7-66 desirable to protect the principal from illegal or unnecessary
7-67 taxation, fines, penalties, or assessments with respect to a
7-68 business, including attempts to recover, in any manner permitted by
7-69 law, money paid before or after the execution of the power of
7-70 attorney.
8-1 Sec. 498. CONSTRUCTION OF POWER RELATING TO INSURANCE
8-2 TRANSACTIONS. In a statutory durable power of attorney, the
8-3 language conferring authority with respect to insurance and annuity
8-4 transactions empowers the attorney in fact or agent to:
8-5 (1) continue, pay the premium or assessment on,
8-6 modify, rescind, release, or terminate a contract procured by or on
8-7 behalf of the principal that insures or provides an annuity to
8-8 either the principal or another person, whether or not the
8-9 principal is a beneficiary under the contract;
8-10 (2) procure new, different, or additional contracts of
8-11 insurance and annuities for the principal or the principal's
8-12 spouse, children, and other dependents and select the amount, type
8-13 of insurance or annuity, and mode of payment;
8-14 (3) pay the premium or assessment on or modify,
8-15 rescind, release, or terminate a contract of insurance or annuity
8-16 procured by the attorney in fact or agent;
8-17 (4) designate the beneficiary of the contract, except
8-18 that an attorney in fact or agent may be named a beneficiary of the
8-19 contract or an extension, renewal, or substitute for the contract
8-20 only to the extent the attorney in fact or agent was named as a
8-21 beneficiary under a contract procured by the principal before
8-22 executing the power of attorney;
8-23 (5) apply for and receive a loan on the security of
8-24 the contract of insurance or annuity;
8-25 (6) surrender and receive the cash surrender value;
8-26 (7) exercise an election;
8-27 (8) change the manner of paying premiums;
8-28 (9) change or convert the type of insurance contract
8-29 or annuity with respect to which the principal has or claims to
8-30 have a power described in this section;
8-31 (10) change the beneficiary of a contract of insurance
8-32 or annuity, except that the attorney in fact or agent may be
8-33 designated a beneficiary only to the extent authorized by
8-34 Subdivision (4) of this section;
8-35 (11) apply for and procure government aid to guarantee
8-36 or pay premiums of a contract of insurance on the life of the
8-37 principal;
8-38 (12) collect, sell, assign, hypothecate, borrow on, or
8-39 pledge the interest of the principal in a contract of insurance or
8-40 annuity; and
8-41 (13) pay from proceeds or otherwise, compromise or
8-42 contest, or apply for refunds in connection with a tax or
8-43 assessment levied by a taxing authority with respect to a contract
8-44 of insurance or annuity or its proceeds or liability accruing
8-45 because of the tax or assessment.
8-46 Sec. 499. CONSTRUCTION OF POWER RELATING TO ESTATE, TRUST,
8-47 AND OTHER BENEFICIARY TRANSACTIONS. In a statutory durable power
8-48 of attorney, the language conferring authority with respect to
8-49 estate, trust, and other beneficiary transactions empowers the
8-50 attorney in fact or agent to act for the principal in all matters
8-51 that affect a trust, probate estate, guardianship, conservatorship,
8-52 escrow, custodianship, or other fund from which the principal is,
8-53 may become, or claims to be entitled, as a beneficiary, to a share
8-54 or payment, including to:
8-55 (1) accept, reject, disclaim, receive, receipt for,
8-56 sell, assign, release, pledge, exchange, or consent to a reduction
8-57 in or modification of a share in or payment from the fund;
8-58 (2) demand or obtain by litigation, action, or
8-59 otherwise money or any other thing of value to which the principal
8-60 is, may become, or claims to be entitled because of the fund;
8-61 (3) initiate, participate in, or oppose a legal or
8-62 judicial proceeding to ascertain the meaning, validity, or effect
8-63 of a deed, will, declaration of trust, or other instrument or
8-64 transaction affecting the interest of the principal;
8-65 (4) initiate, participate in, or oppose a legal or
8-66 judicial proceeding to remove, substitute, or surcharge a
8-67 fiduciary;
8-68 (5) conserve, invest, disburse, or use anything
8-69 received for an authorized purpose; and
8-70 (6) transfer all or part of an interest of the
9-1 principal in real property, stocks, bonds, accounts with financial
9-2 institutions, insurance, and other property to the trustee of a
9-3 revocable trust created by the principal as settlor.
9-4 Sec. 500. CONSTRUCTION OF POWER RELATING TO CLAIMS AND
9-5 LITIGATION. In a statutory durable power of attorney, the language
9-6 conferring general authority with respect to claims and litigation
9-7 empowers the attorney in fact or agent to:
9-8 (1) assert and prosecute before a court or
9-9 administrative agency a claim, a claim for relief, a counterclaim,
9-10 or an offset or defend against an individual, a legal entity, or a
9-11 government, including suits to recover property or other thing of
9-12 value, to recover damages sustained by the principal, to eliminate
9-13 or modify tax liability, or to seek an injunction, specific
9-14 performance, or other relief;
9-15 (2) bring an action to determine adverse claims,
9-16 intervene in an action or litigation, and act as amicus curiae;
9-17 (3) in connection with an action or litigation,
9-18 procure an attachment, garnishment, libel, order of arrest, or
9-19 other preliminary, provisional, or intermediate relief and use an
9-20 available procedure to effect or satisfy a judgment, order, or
9-21 decree;
9-22 (4) in connection with an action or litigation,
9-23 perform any lawful act the principal could perform, including
9-24 acceptance of tender, offer of judgment, admission of facts,
9-25 submission of a controversy on an agreed statement of facts,
9-26 consent to examination before trial, and binding of the principal
9-27 in litigation;
9-28 (5) submit to arbitration, settle, and propose or
9-29 accept a compromise with respect to a claim or litigation;
9-30 (6) waive the issuance and service of process on the
9-31 principal, accept service of process, appear for the principal,
9-32 designate persons on whom process directed to the principal may be
9-33 served, execute and file or deliver stipulations on the principal's
9-34 behalf, verify pleadings, seek appellate review, procure and give
9-35 surety and indemnity bonds, contract and pay for the preparation
9-36 and printing of records and briefs, receive and execute and file or
9-37 deliver a consent, waiver, release, confession of judgment,
9-38 satisfaction of judgment, notice, agreement, or other instrument in
9-39 connection with the prosecution, settlement, or defense of a claim
9-40 or litigation;
9-41 (7) act for the principal with respect to bankruptcy
9-42 or insolvency proceedings, whether voluntary or involuntary,
9-43 concerning the principal or some other person, with respect to a
9-44 reorganization proceeding or a receivership or application for the
9-45 appointment of a receiver or trustee that affects an interest of
9-46 the principal in real or personal property or other thing of value;
9-47 and
9-48 (8) pay a judgment against the principal or a
9-49 settlement made in connection with a claim or litigation and
9-50 receive and conserve money or other thing of value paid in
9-51 settlement of or as proceeds of a claim or litigation.
9-52 Sec. 501. CONSTRUCTION OF POWER RELATING TO PERSONAL AND
9-53 FAMILY MAINTENANCE. In a statutory durable power of attorney, the
9-54 language conferring authority with respect to personal and family
9-55 maintenance empowers the attorney in fact or agent to:
9-56 (1) perform the acts necessary to maintain the
9-57 customary standard of living of the principal, the principal's
9-58 spouse and children, and other individuals customarily or legally
9-59 entitled to be supported by the principal, including providing
9-60 living quarters by purchase, lease, or other contract, or paying
9-61 the operating costs, including interest, amortization payments,
9-62 repairs, and taxes on premises owned by the principal and occupied
9-63 by those individuals;
9-64 (2) provide for the individuals described by
9-65 Subdivision (1) of this section normal domestic help, usual
9-66 vacations and travel expenses, and funds for shelter, clothing,
9-67 food, appropriate education, and other current living costs;
9-68 (3) pay necessary medical, dental, and surgical care,
9-69 hospitalization, and custodial care for the individuals described
9-70 by Subdivision (1) of this section;
10-1 (4) continue any provision made by the principal, for
10-2 the individuals described by Subdivision (1) of this section, for
10-3 automobiles or other means of transportation, including
10-4 registering, licensing, insuring, and replacing the automobiles or
10-5 other means of transportation;
10-6 (5) maintain or open charge accounts for the
10-7 convenience of the individuals described by Subdivision (1) of this
10-8 section and open new accounts the attorney in fact or agent
10-9 considers desirable to accomplish a lawful purpose; and
10-10 (6) continue payments incidental to the membership or
10-11 affiliation of the principal in a church, club, society, order, or
10-12 other organization or to continue contributions to those
10-13 organizations.
10-14 Sec. 502. CONSTRUCTION OF POWER RELATING TO BENEFITS FROM
10-15 CERTAIN GOVERNMENTAL PROGRAMS OR CIVIL OR MILITARY SERVICE. In a
10-16 statutory durable power of attorney, the language conferring
10-17 authority with respect to benefits from social security, Medicare,
10-18 Medicaid, or other governmental programs or civil or military
10-19 service empowers the attorney in fact or agent to:
10-20 (1) execute vouchers in the name of the principal for
10-21 allowances and reimbursements payable by the United States, a
10-22 foreign government, or a state or subdivision of a state to the
10-23 principal, including allowances and reimbursements for
10-24 transportation of the individuals described by Section 501(1) of
10-25 this code, and for shipment of their household effects;
10-26 (2) take possession and order the removal and shipment
10-27 of property of the principal from a post, warehouse, depot, dock,
10-28 or other place of storage or safekeeping, either governmental or
10-29 private, and execute and deliver a release, voucher, receipt, bill
10-30 of lading, shipping ticket, certificate, or other instrument for
10-31 that purpose;
10-32 (3) prepare, file, and prosecute a claim of the
10-33 principal to a benefit or assistance, financial or otherwise, to
10-34 which the principal claims to be entitled under a statute or
10-35 governmental regulation;
10-36 (4) prosecute, defend, submit to arbitration, settle,
10-37 and propose or accept a compromise with respect to any benefits the
10-38 principal may be entitled to receive; and
10-39 (5) receive the financial proceeds of a claim of the
10-40 type described in this section and conserve, invest, disburse, or
10-41 use anything received for a lawful purpose.
10-42 Sec. 503. CONSTRUCTION OF POWER RELATING TO RETIREMENT PLAN
10-43 TRANSACTIONS. In a statutory durable power of attorney, the
10-44 language conferring authority with respect to retirement plan
10-45 transactions empowers the attorney in fact or agent to do any
10-46 lawful act the principal may do with respect to a transaction
10-47 relating to a retirement plan, including to:
10-48 (1) apply for service or disability retirement
10-49 benefits;
10-50 (2) select payment options under any retirement plan
10-51 in which the principal participates, including plans for
10-52 self-employed individuals;
10-53 (3) designate or change the designation of a
10-54 beneficiary or benefits payable by a retirement plan, except that
10-55 an attorney in fact or agent may be named a beneficiary only to the
10-56 extent the attorney in fact or agent was a named beneficiary under
10-57 the retirement plan before the durable power of attorney was
10-58 executed;
10-59 (4) make voluntary contributions to retirement plans
10-60 if authorized by the plan;
10-61 (5) exercise the investment powers available under any
10-62 self-directed retirement plan;
10-63 (6) make "rollovers" of plan benefits into other
10-64 retirement plans;
10-65 (7) borrow from, sell assets to, and purchase assets
10-66 from retirement plans if authorized by the plan;
10-67 (8) waive the right of the principal to be a
10-68 beneficiary of a joint or survivor annuity if the principal is a
10-69 spouse who is not employed;
10-70 (9) receive, endorse, and cash payments from a
11-1 retirement plan;
11-2 (10) waive the right of the principal to receive all
11-3 or a portion of benefits payable by a retirement plan; and
11-4 (11) request and receive information relating to the
11-5 principal from retirement plan records.
11-6 Sec. 504. CONSTRUCTION OF POWER RELATING TO TAX MATTERS. In
11-7 a statutory durable power of attorney, the language conferring
11-8 authority with respect to tax matters empowers the attorney in fact
11-9 or agent to:
11-10 (1) prepare, sign, and file federal, state, local, and
11-11 foreign income, gift, payroll, Federal Insurance Contributions Act,
11-12 and other tax returns, claims for refunds, requests for extension
11-13 of time, petitions regarding tax matters, and any other tax-related
11-14 documents, including receipts, offers, waivers, consents, including
11-15 consents and agreements under Section 2032A, Internal Revenue Code
11-16 of 1986 (26 U.S.C. Section 2032A), closing agreements, and any
11-17 power of attorney form required by the Internal Revenue Service or
11-18 other taxing authority with respect to a tax year on which the
11-19 statute of limitations has not run and 25 tax years following that
11-20 tax year;
11-21 (2) pay taxes due, collect refunds, post bonds,
11-22 receive confidential information, and contest deficiencies
11-23 determined by the Internal Revenue Service or other taxing
11-24 authority;
11-25 (3) exercise any election available to the principal
11-26 under federal, state, local, or foreign tax law; and
11-27 (4) act for the principal in all tax matters for all
11-28 periods before the Internal Revenue Service and any other taxing
11-29 authority.
11-30 Sec. 505. EXISTING INTEREST; FOREIGN INTERESTS. The powers
11-31 described in Sections 492 through 504 of this code may be exercised
11-32 equally with respect to an interest the principal has at the time
11-33 the durable power of attorney is executed or acquires later,
11-34 whether or not the property is located in this state and whether or
11-35 not the powers are exercised or the durable power of attorney is
11-36 executed in this state.
11-37 Sec. 506. UNIFORMITY OF APPLICATION AND CONSTRUCTION. This
11-38 chapter shall be applied and construed to effect its general
11-39 purpose to make uniform the law with respect to the subject of this
11-40 chapter among states enacting it.
11-41 SECTION 2. Section 36A, Probate Code, is repealed. A power
11-42 of attorney executed in compliance with that section before the
11-43 effective date of this Act is valid according to the terms of that
11-44 section as it existed at the time of the execution, and that
11-45 section is continued in effect for that purpose.
11-46 SECTION 3. This Act takes effect September 1, 1993.
11-47 SECTION 4. The importance of this legislation and the
11-48 crowded condition of the calendars in both houses create an
11-49 emergency and an imperative public necessity that the
11-50 constitutional rule requiring bills to be read on three several
11-51 days in each house be suspended, and this rule is hereby suspended.
11-52 * * * * *
11-53 Austin,
11-54 Texas
11-55 February 9, 1993
11-56 Hon. Bob Bullock
11-57 President of the Senate
11-58 Sir:
11-59 We, your Committee on Jurisprudence to which was referred S.B. No.
11-60 176, have had the same under consideration, and I am instructed to
11-61 report it back to the Senate with the recommendation that it do not
11-62 pass, but that the Committee Substitute adopted in lieu thereof do
11-63 pass and be printed.
11-64 Henderson,
11-65 Chairman
11-66 * * * * *
11-67 WITNESSES
11-68 FOR AGAINST ON
11-69 ___________________________________________________________________
11-70 Name: Alvin Golden x
12-1 Representing: State Bar (reptl section)
12-2 City: Austin
12-3 -------------------------------------------------------------------
12-4 Name: Dianne Hughes x
12-5 Representing: Trust Finance Service
12-6 Division
12-7 City: Austin
12-8 -------------------------------------------------------------------
12-9 Name: Karen M. Neeley x
12-10 Representing: Independent Bankers Assn
12-11 oftx
12-12 City: Austin
12-13 -------------------------------------------------------------------