PMWJ S.B. 620 75(R)BILL ANALYSIS JUDICIAL AFFAIRS S.B. 620 By: Harris (Hilbert) 5-8-97 Committee Report (Unamended) BACKGROUND Currently, the law does not deal with the effect of divorce or annulment on a former spouse's authority to act as an attorney in fact or agent as designated under a durable power of attorney. While it is generally agreed that a former spouse's right under a power of attorney should cease upon divorce, that cessation must be balanced with the rights of third parties. This bill modifies current law by terminating the rights of a former spouse while protecting innocent third parties. PURPOSE S.B. 620 modifies current law regarding durable powers of attorney by terminating the rights of a former spouse while protecting innocent third parties. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1 adds new Section 485A to the Probate Code as follows: New Sec. 485A. EFFECT OF PRINCIPAL'S DIVORCE OR MARRIAGE ANNULMENT IF FORMER SPOUSE IS ATTORNEY IN FACT OR AGENT. Provides that a durable power of attorney between a principal and agent terminates upon divorce or annulment of the principal and agent. SECTION 2 amends Section 486, Probate Code, to add "Divorce, or Marriage Annulment" to the heading. Provides that an appointment as agent for a principal before a divorce or an annulment and a subsequent divorce or annulment does not revoke or terminate the agency as to a person other than the principal's former spouse if the person acts in good faith under or in reliance on the power. Makes conforming and nonsubstantive changes. SECTION 3 amends Section 487, Probate Code, to add "Good Faith Reliance" to the heading and adds a provision that a third party who relies in good faith on the acts of an attorney or agent within the scope of the power of attorney is not liable to the principal, including actions taken without knowledge that the agent or attorney is the principal's former spouse and that the agency was terminated by divorce or annulment. SECTION 4 amends Section 490(a), Probate Code, to delete a provision setting forth a third party's liability to a principal. Sets forth a new form for a power of attorney. SECTION 5 amends Section 492, Probate Code, to authorize an agent to manage and supervise real property. SECTION 6 adds a new Section 503(b), Probate Code, to define "retirement plan." SECTION 7. Repealer: Section 490(c), Section 481 et seq., Probate Code (Power of attorney). SECTION 8. Effective date. Application of act. SECTION 9. Emergency clause.