By Hilbert H.B. No. 2361
75R4387 BEM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to durable powers of attorney.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The Durable Power of Attorney Act (Section 481 et
1-5 seq., Texas Probate Code) is amended by adding Section 485A to read
1-6 as follows:
1-7 Sec. 485A. EFFECT OF PRINCIPAL'S DIVORCE OR MARRIAGE
1-8 ANNULMENT IF FORMER SPOUSE IS ATTORNEY IN FACT OR AGENT. If, after
1-9 execution of a durable power of attorney, a principal is divorced
1-10 from a person who has been appointed the principal's attorney in
1-11 fact or agent or a principal's marriage to a person who has been
1-12 appointed the principal's attorney in fact or agent is annulled,
1-13 the powers of the attorney in fact or agent granted to the
1-14 principal's former spouse terminate on the date on which the
1-15 divorce or annulment of marriage is granted by a court, unless
1-16 otherwise expressly provided by the durable power of attorney.
1-17 SECTION 2. Section 486, Durable Power of Attorney Act
1-18 (Section 481 et seq., Texas Probate Code), is amended to read as
1-19 follows:
1-20 Sec. 486. KNOWLEDGE OF DEATH, GUARDIAN OF ESTATE, [OR]
1-21 REVOCATION, DIVORCE, OR MARRIAGE ANNULMENT; GOOD-FAITH ACTS. (a)
1-22 The revocation by, the death of, or the qualification of a guardian
1-23 of the estate of a principal who has executed a durable power of
1-24 attorney does not revoke or terminate the agency as to the attorney
2-1 in fact, agent, or other person who, without actual knowledge of
2-2 the termination of the power by revocation, by the principal's
2-3 death, or by the qualification of a guardian of the estate of the
2-4 principal, acts in good faith under or in reliance on the power.
2-5 (b) The divorce of a principal from a person who has been
2-6 appointed the principal's attorney in fact or agent before the date
2-7 on which the divorce is granted or the annulment of the marriage of
2-8 a principal and a person who has been appointed the principal's
2-9 attorney in fact or agent before the date the annulment is granted
2-10 does not revoke or terminate the agency as to a person other than
2-11 the principal's former spouse who, without actual knowledge of the
2-12 termination of the power on the divorce or annulment of the
2-13 marriage, acts in good faith under or in reliance on the power.
2-14 (c) Any action [so] taken under this section, unless
2-15 otherwise invalid or unenforceable, binds successors in interest of
2-16 the principal.
2-17 SECTION 3. Section 487, Durable Power of Attorney Act
2-18 (Section 481 et seq., Texas Probate Code), is amended to read as
2-19 follows:
2-20 Sec. 487. AFFIDAVIT OF LACK OF KNOWLEDGE OR TERMINATION OF
2-21 POWER; RECORDING; GOOD-FAITH RELIANCE. (a) As to acts undertaken
2-22 in good-faith reliance on the durable power of attorney, an
2-23 affidavit executed by the attorney in fact or agent under a durable
2-24 power of attorney stating that the attorney in fact or agent did
2-25 not have at the time of exercise of the power actual knowledge of
2-26 the termination of the power by revocation, by the principal's
2-27 death, by the prinicipal's divorce from a person who has been
3-1 appointed the principal's attorney in fact or agent, by the
3-2 annulment of the marriage of the principal and a person who has
3-3 been appointed the principal's attorney in fact or agent, or by the
3-4 qualification of a guardian of the estate of the principal is
3-5 conclusive proof as between the attorney in fact or agent and a
3-6 person other than the principal or the principal's personal
3-7 representative dealing with the attorney in fact or agent of the
3-8 nonrevocation or nontermination of the power at that time.
3-9 (b) As to acts undertaken in good-faith reliance on the
3-10 durable power of attorney, an affidavit executed by the attorney in
3-11 fact or agent under a durable power of attorney stating that the
3-12 principal is disabled or incapacitated, as defined by the power, is
3-13 conclusive proof as between the attorney in fact or agent and a
3-14 person other than the principal or the principal's personal
3-15 representative dealing with the attorney in fact or agent of the
3-16 disability or incapacity of the principal at that time.
3-17 (c) If the exercise of the power of attorney requires
3-18 execution and delivery of any instrument that is to be recorded, an
3-19 affidavit executed under Subsection (a) or (b) of this section,
3-20 when authenticated for record, may also be recorded.
3-21 (d) This section does not affect any provision in a durable
3-22 power of attorney for its termination by expiration of time or
3-23 occurrence of an event other than express revocation.
3-24 (e) When a durable power of attorney is used, a third party
3-25 who relies in good faith on the acts of an attorney in fact or
3-26 agent within the scope of the power of attorney is not liable to
3-27 the principal.
4-1 SECTION 4. Section 490(a), Durable Power of Attorney Act
4-2 (Section 481 et seq., Texas Probate Code), is amended to read as
4-3 follows:
4-4 (a) The following form is known as a "statutory durable
4-5 power of attorney." A person may use a statutory durable power of
4-6 attorney to grant an attorney in fact or agent powers with respect
4-7 to a person's property and financial matters. A power of attorney
4-8 in substantially the following form has the meaning and effect
4-9 prescribed by this chapter. The validity of a power of attorney as
4-10 meeting the requirements of a statutory durable power of attorney
4-11 is not affected by the fact that one or more of the categories of
4-12 optional powers listed in the form are struck or the form includes
4-13 specific limitations on or additions to the attorney in fact's or
4-14 agent's powers.
4-15 [When a power in substantially the form set forth in this
4-16 chapter is used, third parties who rely in good faith on the acts
4-17 of the agent within the scope of the power may do so without fear
4-18 of liability to the principal.]
4-19 The following form is not exclusive, and other forms of power
4-20 of attorney may be used.
4-21 STATUTORY DURABLE POWER OF ATTORNEY
4-22 NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND
4-23 SWEEPING. THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT,
4-24 CHAPTER XII, TEXAS PROBATE CODE. IF YOU HAVE ANY QUESTIONS ABOUT
4-25 THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES
4-26 NOT AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE
4-27 DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU
5-1 LATER WISH TO DO SO.
5-2 I, __________ (insert your name and address), [my social
5-3 security number being __________ (insert your proper SS#),] appoint
5-4 __________ (insert the name and address of the person appointed) as
5-5 my agent (attorney-in-fact) to act for me in any lawful way with
5-6 respect to all of the following powers except for a power that I
5-7 have crossed out below.
5-8 TO WITHHOLD A POWER, YOU MUST CROSS OUT EACH POWER WITHHELD.
5-9 Real property transactions;
5-10 Tangible personal property transactions;
5-11 Stock and bond transactions;
5-12 Commodity and option transactions;
5-13 Banking and other financial institution transactions;
5-14 Business operating transactions;
5-15 Insurance and annuity transactions;
5-16 Estate, trust, and other beneficiary transactions;
5-17 Claims and litigation;
5-18 Personal and Family Maintenance;
5-19 Benefits from social security, Medicare, Medicaid, or
5-20 other governmental programs or civil or military service;
5-21 Retirement plan transactions;
5-22 Tax matters.
5-23 IF NO POWER LISTED ABOVE IS CROSSED OUT, THIS DOCUMENT SHALL
5-24 BE CONSTRUED AND INTERPRETED AS A GENERAL POWER OF ATTORNEY AND MY
5-25 AGENT (ATTORNEY IN FACT) HAS THE POWER AND AUTHORITY TO PERFORM OR
5-26 UNDERTAKE ANY ACTION I COULD PERFORM OR UNDERTAKE IF I WERE
5-27 PERSONALLY PRESENT
6-1 [the following initialed subjects:]
6-2 [TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN
6-3 FRONT OF (N) AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS.]
6-4 [TO GRANT ONE OR MORE, BUT FEWER THAN ALL, OF THE FOLLOWING
6-5 POWERS, INITIAL THE LINE IN FRONT OF EACH POWER YOU ARE GRANTING.]
6-6 [TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF IT.
6-7 YOU MAY, BUT NEED NOT, CROSS OUT EACH POWER WITHHELD.]
6-8 [INITIAL]
6-9 [_______ (A) real property transactions;]
6-10 [_______ (B) tangible personal property transactions;]
6-11 [_______ (C) stock and bond transactions;]
6-12 [_______ (D) commodity and option transactions;]
6-13 [_______ (E) banking and other financial institution
6-14 transactions;]
6-15 [_______ (F) business operating transactions;]
6-16 [_______ (G) insurance and annuity transactions;]
6-17 [_______ (H) estate, trust, and other beneficiary transactions;]
6-18 [_______ (I) claims and litigation;]
6-19 [_______ (J) personal and family maintenance;]
6-20 [_______ (K) benefits from social security, Medicare, Medicaid,
6-21 or other
6-22 governmental programs or civil or military service;]
6-23 [_______ (L) retirement plan transactions;]
6-24 [_______ (M) tax matters;]
6-25 [_______ (N) ALL OF THE POWERS LISTED IN (A) THROUGH (M). YOU
6-26 NEED NOT
6-27 INITIAL ANY OTHER LINES IF YOU INITIAL LINE (N)].
7-1 SPECIAL INSTRUCTIONS:
7-2 Special instructions applicable to gifts (initial in front of
7-3 the following sentence to have it apply):
7-4 I grant my agent (attorney in fact) the power to apply my
7-5 property to make gifts, except that the amount of a gift to an
7-6 individual may not exceed the amount of annual exclusions allowed
7-7 from the federal gift tax for the calendar year of the gift.
7-8 ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS
7-9 LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.
7-10 ___________________________________________________________________
7-11 ___________________________________________________________________
7-12 ___________________________________________________________________
7-13 ___________________________________________________________________
7-14 ___________________________________________________________________
7-15 ___________________________________________________________________
7-16 ___________________________________________________________________
7-17 ___________________________________________________________________
7-18 ___________________________________________________________________
7-19 ___________________________________________________________________
7-20 UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS
7-21 EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.
7-22 CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE
7-23 ALTERNATIVE NOT CHOSEN:
7-24 (A) This power of attorney is not affected by my
7-25 subsequent disability or incapacity.
7-26 (B) This power of attorney becomes effective upon my
7-27 disability or incapacity.
8-1 YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY
8-2 IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.
8-3 IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED
8-4 THAT YOU CHOSE ALTERNATIVE (A).
8-5 If Alternative (B) is chosen and a definition of my
8-6 disability or incapacity is not contained in this power of
8-7 attorney, I shall be considered disabled or incapacitated for
8-8 purposes of this power of attorney only if a physician certifies in
8-9 writing at a date later than the date this power of attorney is
8-10 executed that, based on the physician's medical examination of me,
8-11 I am mentally incapable of managing my financial affairs. I
8-12 authorize the physician who examines me for this purpose to
8-13 disclose my physical or mental condition to another person to
8-14 determine the nature of my incapacity or disability. A third party
8-15 who accepts this power of attorney is fully protected from any
8-16 action taken under this power of attorney that is based on the
8-17 determination made by a physician of my disability or incapacity.
8-18 I agree that any third party who receives a copy of this
8-19 document may act under it. Revocation of the durable power of
8-20 attorney is not effective as to a third party until the third party
8-21 receives actual notice of the revocation. I agree to indemnify the
8-22 third party for any claims that arise against the third party
8-23 because of reliance on this power of attorney.
8-24 If any agent named by me dies, becomes legally disabled,
8-25 resigns, or refuses to act, I name the following (each to act alone
8-26 and successively, in the order named) as successor(s) to that
8-27 agent: __________.
9-1 Signed this ______ day of __________, 19___
9-2 __________________________________
9-3 (your signature)
9-4 State of _______________________
9-5 County of ______________________
9-6 This document was acknowledged before me on
9-7 __________________________(date) by _______________________________
9-8 (name of principal)
9-9 _________________________________
9-10 (signature of notarial officer)
9-11 (Seal, if any, of notary) ___________________________________
9-12 (printed name)
9-13 My commission expires: __________
9-14 THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR ACTING UNDER
9-15 THE APPOINTMENT, ASSUMES THE FIDUCIARY AND OTHER LEGAL
9-16 RESPONSIBILITIES OF AN AGENT.
9-17 SECTION 5. Section 492, Durable Power of Attorney Act
9-18 (Section 481 et seq., Texas Probate Code), is amended to read as
9-19 follows:
9-20 Sec. 492. CONSTRUCTION OF POWER RELATING TO REAL PROPERTY
9-21 TRANSACTIONS. In a statutory durable power of attorney, the
9-22 language conferring authority with respect to real property
9-23 transactions empowers the attorney in fact or agent without further
9-24 reference to a specific description of the real property to:
9-25 (1) accept as a gift or as security for a loan or
9-26 reject, demand, buy, lease, receive, or otherwise acquire an
9-27 interest in real property or a right incident to real property;
10-1 (2) sell, exchange, convey with or without covenants,
10-2 quitclaim, release, surrender, mortgage, encumber, partition,
10-3 consent to partitioning, subdivide, apply for zoning, rezoning, or
10-4 other governmental permits, plat or consent to platting, develop,
10-5 grant options concerning, lease or sublet, or otherwise dispose of
10-6 an estate or interest in real property or a right incident to real
10-7 property;
10-8 (3) release, assign, satisfy, and enforce by
10-9 litigation, action, or otherwise a mortgage, deed of trust,
10-10 encumbrance, lien, or other claim to real property that exists or
10-11 is claimed to exist;
10-12 (4) do any act of management or of conservation with
10-13 respect to an interest in real property, or a right incident to
10-14 real property, owned or claimed to be owned by the principal,
10-15 including power to:
10-16 (A) insure against a casualty, liability, or
10-17 loss;
10-18 (B) obtain or regain possession or protect the
10-19 interest or right by litigation, action, or otherwise;
10-20 (C) pay, compromise, or contest taxes or
10-21 assessments or apply for and receive refunds in connection with
10-22 them; [and]
10-23 (D) purchase supplies, hire assistance or labor,
10-24 or make repairs or alterations in the real property; and
10-25 (E) manage and supervise an interest in real
10-26 property, including entering into a lease for oil, gas, and mineral
10-27 purposes, making contracts for development of the mineral estate,
11-1 or making pooling and unitization agreements regarding the mineral
11-2 estate;
11-3 (5) use, develop, alter, replace, remove, erect, or
11-4 install structures or other improvements on real property in which
11-5 the principal has or claims to have an estate, interest, or right;
11-6 (6) participate in a reorganization with respect to
11-7 real property or a legal entity that owns an interest in or right
11-8 incident to real property, receive and hold shares of stock or
11-9 obligations received in a plan or reorganization, and act with
11-10 respect to the shares or obligations, including:
11-11 (A) selling or otherwise disposing of the shares
11-12 or obligations;
11-13 (B) exercising or selling an option, conversion,
11-14 or similar right with respect to the shares or obligations; and
11-15 (C) voting the shares or obligations in person
11-16 or by proxy;
11-17 (7) change the form of title of an interest in or
11-18 right incident to real property; and
11-19 (8) dedicate easements or other real property in which
11-20 the principal has or claims to have an interest to public use, with
11-21 or without consideration.
11-22 SECTION 6. Section 503, Durable Power of Attorney Act
11-23 (Section 481 et seq., Texas Probate Code), is amended to read as
11-24 follows:
11-25 Sec. 503. CONSTRUCTION OF POWER RELATING TO RETIREMENT PLAN
11-26 TRANSACTIONS. (a) In a statutory durable power of attorney, the
11-27 language conferring authority with respect to retirement plan
12-1 transactions empowers the attorney in fact or agent to do any
12-2 lawful act the principal may do with respect to a transaction
12-3 relating to a retirement plan, including to:
12-4 (1) apply for service or disability retirement
12-5 benefits;
12-6 (2) select payment options under any retirement plan
12-7 in which the principal participates, including plans for
12-8 self-employed individuals;
12-9 (3) designate or change the designation of a
12-10 beneficiary or benefits payable by a retirement plan, except that
12-11 an attorney in fact or agent may be named a beneficiary only to the
12-12 extent the attorney in fact or agent was a named beneficiary under
12-13 the retirement plan before the durable power of attorney was
12-14 executed;
12-15 (4) make voluntary contributions to retirement plans
12-16 if authorized by the plan;
12-17 (5) exercise the investment powers available under any
12-18 self-directed retirement plan;
12-19 (6) make "rollovers" of plan benefits into other
12-20 retirement plans;
12-21 (7) borrow from, sell assets to, and purchase assets
12-22 from retirement plans if authorized by the plan;
12-23 (8) waive the right of the principal to be a
12-24 beneficiary of a joint or survivor annuity if the principal is a
12-25 spouse who is not employed;
12-26 (9) receive, endorse, and cash payments from a
12-27 retirement plan;
13-1 (10) waive the right of the principal to receive all
13-2 or a portion of benefits payable by a retirement plan; and
13-3 (11) request and receive information relating to the
13-4 principal from retirement plan records.
13-5 (b) In this section, "retirement plan" means:
13-6 (1) an employee pension benefit plan as defined by
13-7 Section 1002, Employee Retirement Income Security Act of 1974
13-8 (ERISA) (29 U.S.C. Section 1002), without regard to the provisions
13-9 of Section (2)(B) of that section;
13-10 (2) a plan that does not meet the definition of an
13-11 employee benefit plan under ERISA because the plan does not cover
13-12 common law employees;
13-13 (3) a plan that is similar to an employee benefit plan
13-14 under ERISA, regardless of whether it is covered by Title I of
13-15 ERISA, including a plan that provides death benefits to the
13-16 beneficiary of employees; and
13-17 (4) an individual retirement account or annuity or a
13-18 self-employed pension plan or similar plan or account.
13-19 SECTION 7. Section 490(c), Durable Power of Attorney Act
13-20 (Section 481 et seq., Texas Probate Code), is repealed.
13-21 SECTION 8. This Act takes effect September 1, 1997, and
13-22 applies only to a durable power of attorney or statutory durable
13-23 power of attorney that is executed on or after that date. A
13-24 durable power of attorney or statutory durable power of attorney
13-25 that is executed before the effective date of this Act is governed
13-26 by the law in effect on the date the power of attorney was
13-27 executed, and the former law is continued in effect for that
14-1 purpose.
14-2 SECTION 9. The importance of this legislation and the
14-3 crowded condition of the calendars in both houses create an
14-4 emergency and an imperative public necessity that the
14-5 constitutional rule requiring bills to be read on three several
14-6 days in each house be suspended, and this rule is hereby suspended.