By: Harris S.B. No. 620
A BILL TO BE ENTITLED
AN ACT
1-1 relating to durable powers of attorney.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. The Durable Power of Attorney Act (Section 481 et
1-4 seq., Texas Probate Code) is amended by adding Section 485A to read
1-5 as follows:
1-6 Sec. 485A. EFFECT OF PRINCIPAL'S DIVORCE OR MARRIAGE
1-7 ANNULMENT IF FORMER SPOUSE IS ATTORNEY IN FACT OR AGENT. If, after
1-8 execution of a durable power of attorney, the principal is divorced
1-9 from a person who has been appointed the principal's attorney in
1-10 fact or agent or the principal's marriage to a person who has been
1-11 appointed the principal's attorney in fact or agent is annulled,
1-12 the powers of the attorney in fact or agent granted to the
1-13 principal's former spouse shall terminate on the date on which the
1-14 divorce or annulment of marriage is granted by a court, unless
1-15 otherwise expressly provided by the durable power of attorney.
1-16 SECTION 2. Section 486, Durable Power of Attorney Act
1-17 (Section 481 et seq., Texas Probate Code), is amended to read as
1-18 follows:
1-19 Sec. 486. KNOWLEDGE OF DEATH, GUARDIAN OF ESTATE, [OR]
1-20 REVOCATION, DIVORCE, OR MARRIAGE ANNULMENT; GOOD-FAITH ACTS.
1-21 (a) The revocation by, the death of, or the qualification of a
1-22 guardian of the estate of a principal who has executed a durable
1-23 power of attorney does not revoke or terminate the agency as to the
2-1 attorney in fact, agent, or other person who, without actual
2-2 knowledge of the termination of the power by revocation, by the
2-3 principal's death, or by the qualification of a guardian of the
2-4 estate of the principal, acts in good faith under or in reliance on
2-5 the power.
2-6 (b) The divorce of a principal from a person who has been
2-7 appointed the principal's attorney in fact or agent before the date
2-8 on which the divorce is granted or the annulment of the marriage of
2-9 a principal and a person who has been appointed the principal's
2-10 attorney in fact or agent before the date the annulment is granted
2-11 does not revoke or terminate the agency as to a person other than
2-12 the principal's former spouse if the person acts in good faith
2-13 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
3-1 the termination of the power by revocation, by the principal's
3-2 death, by the principal's divorce or the annulment of the marriage
3-3 of the principal if the attorney in fact or agent was the
3-4 principal's spouse, or by the qualification of a guardian of the
3-5 estate of the principal is conclusive proof as between the attorney
3-6 in fact or agent and a person other than the principal or the
3-7 principal's personal representative dealing with the attorney in
3-8 fact or agent of the nonrevocation or nontermination of the power
3-9 at that time.
3-10 (b) As to acts undertaken in good-faith reliance on the
3-11 durable power of attorney, an affidavit executed by the attorney in
3-12 fact or agent under a durable power of attorney stating that the
3-13 principal is disabled or incapacitated, as defined by the power, is
3-14 conclusive proof as between the attorney in fact or agent and a
3-15 person other than the principal or the principal's personal
3-16 representative dealing with the attorney in fact or agent of the
3-17 disability or incapacity of the principal at that time.
3-18 (c) If the exercise of the power of attorney requires
3-19 execution and delivery of any instrument that is to be recorded, an
3-20 affidavit executed under Subsection (a) or (b) of this section,
3-21 when authenticated for record, may also be recorded.
3-22 (d) This section does not affect any provision in a durable
3-23 power of attorney for its termination by expiration of time or
3-24 occurrence of an event other than express revocation.
3-25 (e) When a durable power of attorney is used, a third party
4-1 who relies in good faith on the acts of an attorney in fact or
4-2 agent within the scope of the power of attorney is not liable to
4-3 the principal.
4-4 SECTION 4. Subsection (a), Section 490, Durable Power of
4-5 Attorney Act (Section 481 et seq., Texas Probate Code), is amended
4-6 to read as follows:
4-7 (a) The following form is known as a "statutory durable
4-8 power of attorney." A person may use a statutory durable power of
4-9 attorney to grant an attorney in fact or agent powers with respect
4-10 to a person's property and financial matters. A power of attorney
4-11 in substantially the following form has the meaning and effect
4-12 prescribed by this chapter. The validity of a power of attorney as
4-13 meeting the requirements of a statutory durable power of attorney
4-14 is not affected by the fact that one or more of the categories of
4-15 optional powers listed in the form are struck or the form includes
4-16 specific limitations on or additions to the attorney in fact's or
4-17 agent's powers.
4-18 [When a power in substantially the form set forth in this
4-19 chapter is used, third parties who rely in good faith on the acts
4-20 of the agent within the scope of the power may do so without fear
4-21 of liability to the principal.]
4-22 The following form is not exclusive, and other forms of power
4-23 of attorney may be used.
4-24 STATUTORY DURABLE POWER OF ATTORNEY
4-25 NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND
5-1 SWEEPING. THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT,
5-2 CHAPTER XII, TEXAS PROBATE CODE. IF YOU HAVE ANY QUESTIONS ABOUT
5-3 THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES
5-4 NOT AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE
5-5 DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU
5-6 LATER WISH TO DO SO.
5-7 I, __________ (insert your name and address), [my social
5-8 security number being __________ (insert your proper SS#),] appoint
5-9 __________ (insert the name and address of the person appointed) as
5-10 my agent (attorney-in-fact) to act for me in any lawful way with
5-11 respect to all of the following powers except for a power that I
5-12 have crossed out below.
5-13 TO WITHHOLD A POWER, YOU MUST CROSS OUT EACH POWER WITHHELD.
5-14 Real property transactions;
5-15 Tangible personal property transactions;
5-16 Stock and bond transactions;
5-17 Commodity and option transactions;
5-18 Banking and other financial institution transactions;
5-19 Business operating transactions;
5-20 Insurance and annuity transactions;
5-21 Estate, trust, and other beneficiary transactions;
5-22 Claims and litigation;
5-23 Personal and family maintenance;
5-24 Benefits from social security, Medicare, Medicaid, or
5-25 other governmental programs or civil or military service;
6-1 Retirement plan transactions;
6-2 Tax matters.
6-3 IF NO POWER LISTED ABOVE IS CROSSED OUT, THIS DOCUMENT SHALL
6-4 BE CONSTRUED AND INTERPRETED AS A GENERAL POWER OF ATTORNEY AND MY
6-5 AGENT (ATTORNEY IN FACT) SHALL HAVE THE POWER AND AUTHORITY TO
6-6 PERFORM OR UNDERTAKE ANY ACTION I COULD PERFORM OR UNDERTAKE IF I
6-7 WERE PERSONALLY PRESENT
6-8 [the following initialed subjects:]
6-9 [TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN
6-10 FRONT OF (N) AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS.]
6-11 [TO GRANT ONE OR MORE, BUT FEWER THAN ALL, OF THE FOLLOWING
6-12 POWERS, INITIAL THE LINE IN FRONT OF EACH POWER YOU ARE GRANTING.]
6-13 [TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF IT.
6-14 YOU MAY, BUT NEED NOT, CROSS OUT EACH POWER WITHHELD.]
6-15 [INITIAL]
6-16 [_______ (A) real property transactions;]
6-17 [_______ (B) tangible personal property transactions;]
6-18 [_______ (C) stock and bond transactions;]
6-19 [_______ (D) commodity and option transactions;]
6-20 [_______ (E) banking and other financial institution transactions;]
6-21 [_______ (F) business operating transactions;]
6-22 [_______ (G) insurance and annuity transactions;]
6-23 [_______ (H) estate, trust, and other beneficiary transactions;]
6-24 [_______ (I) claims and litigation;]
6-25 [_______ (J) personal and family maintenance;]
7-1 [_______ (K) benefits from social security, Medicare, Medicaid, or
7-2 other governmental programs or civil or military
7-3 service;]
7-4 [_______ (L) retirement plan transactions;]
7-5 [_______ (M) tax matters;]
7-6 [_______ (N) ALL OF THE POWERS LISTED IN (A) THROUGH (M). YOU
7-7 NEED NOT INITIAL ANY OTHER LINES IF YOU INITIAL LINE
7-8 (N)].
7-9 SPECIAL INSTRUCTIONS:
7-10 Special instructions applicable to gifts (initial in front of
7-11 the following sentence to have it apply):
7-12 I grant my agent (attorney in fact) the power to apply my
7-13 property to make gifts, except that the amount of a gift to an
7-14 individual may not exceed the amount of annual exclusions allowed
7-15 from the federal gift tax for the calendar year of the gift.
7-16 ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS
7-17 LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.
7-18 ___________________________________________________________________
7-19 ___________________________________________________________________
7-20 ___________________________________________________________________
7-21 ___________________________________________________________________
7-22 ___________________________________________________________________
7-23 ___________________________________________________________________
7-24 ___________________________________________________________________
7-25 ___________________________________________________________________
8-1 ___________________________________________________________________
8-2 ___________________________________________________________________
8-3 UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS
8-4 EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.
8-5 CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE
8-6 ALTERNATIVE NOT CHOSEN:
8-7 (A) This power of attorney is not affected by my
8-8 subsequent disability or incapacity.
8-9 (B) This power of attorney becomes effective upon my
8-10 disability or incapacity.
8-11 YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY
8-12 IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.
8-13 IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED
8-14 THAT YOU CHOSE ALTERNATIVE (A).
8-15 If Alternative (B) is chosen and a definition of my
8-16 disability or incapacity is not contained in this power of
8-17 attorney, I shall be considered disabled or incapacitated for
8-18 purposes of this power of attorney if a physician certifies in
8-19 writing at a date later than the date this power of attorney is
8-20 executed that, based on the physician's medical examination of me,
8-21 I am mentally incapable of managing my financial affairs. I
8-22 authorize the physician who examines me for this purpose to
8-23 disclose my physical or mental condition to another person for
8-24 purposes of this power of attorney. A third party who accepts this
8-25 power of attorney is fully protected from any action taken under
9-1 this power of attorney that is based on the determination made by a
9-2 physician of my disability or incapacity.
9-3 I agree that any third party who receives a copy of this
9-4 document may act under it. Revocation of the durable power of
9-5 attorney is not effective as to a third party until the third party
9-6 receives actual notice of the revocation. I agree to indemnify the
9-7 third party for any claims that arise against the third party
9-8 because of reliance on this power of attorney.
9-9 If any agent named by me dies, becomes legally disabled,
9-10 resigns, or refuses to act, I name the following (each to act alone
9-11 and successively, in the order named) as successor(s) to that
9-12 agent: __________.
9-13 Signed this ______ day of __________, 19___
9-14 __________________________________
9-15 (your signature)
9-16 State of _______________________
9-17 County of ______________________
9-18 This document was acknowledged before me on
9-19 __________________________(date) by _______________________________
9-20 (name of principal)
9-21 _________________________________
9-22 (signature of notarial officer)
9-23 (Seal, if any, of notary) ___________________________________
9-24 (printed name)
9-25 My commission expires: __________
10-1 THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR ACTING UNDER
10-2 THE APPOINTMENT, ASSUMES THE FIDUCIARY AND OTHER LEGAL
10-3 RESPONSIBILITIES OF AN AGENT.
10-4 SECTION 5. Section 492, Durable Power of Attorney Act
10-5 (Section 481 et seq., Texas Probate Code), is amended to read as
10-6 follows:
10-7 Sec. 492. CONSTRUCTION OF POWER RELATING TO REAL PROPERTY
10-8 TRANSACTIONS. In a statutory durable power of attorney, the
10-9 language conferring authority with respect to real property
10-10 transactions empowers the attorney in fact or agent without further
10-11 reference to a specific description of the real property 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;
11-1 (4) do any act of management or of conservation with
11-2 respect to an interest in real property, or a right incident to
11-3 real property, owned or claimed to be owned by the principal,
11-4 including power to:
11-5 (A) insure against a casualty, liability, or
11-6 loss;
11-7 (B) obtain or regain possession or protect the
11-8 interest or right by litigation, action, or otherwise;
11-9 (C) pay, compromise, or contest taxes or
11-10 assessments or apply for and receive refunds in connection with
11-11 them; [and]
11-12 (D) purchase supplies, hire assistance or labor,
11-13 or make repairs or alterations in the real property; and
11-14 (E) manage and supervise an interest in real
11-15 property, including the mineral estate, by, for example, entering
11-16 into a lease for oil, gas, and mineral purposes, making contracts
11-17 for development of the mineral estate, or making pooling and
11-18 unitization agreements;
11-19 (5) use, develop, alter, replace, remove, erect, or
11-20 install structures or other improvements on real property in which
11-21 the principal has or claims to have an estate, interest, or right;
11-22 (6) participate in a reorganization with respect to
11-23 real property or a legal entity that owns an interest in or right
11-24 incident to real property, receive and hold shares of stock or
11-25 obligations received in a plan or reorganization, and act with
12-1 respect to the shares or obligations, including:
12-2 (A) selling or otherwise disposing of the shares
12-3 or obligations;
12-4 (B) exercising or selling an option, conversion,
12-5 or similar right with respect to the shares or obligations; and
12-6 (C) voting the shares or obligations in person
12-7 or by proxy;
12-8 (7) change the form of title of an interest in or
12-9 right incident to real property; and
12-10 (8) dedicate easements or other real property in which
12-11 the principal has or claims to have an interest to public use, with
12-12 or without consideration.
12-13 SECTION 6. Section 503, Durable Power of Attorney Act
12-14 (Section 481 et seq., Texas Probate Code), is amended to read as
12-15 follows:
12-16 Sec. 503. CONSTRUCTION OF POWER RELATING TO RETIREMENT PLAN
12-17 TRANSACTIONS. (a) In a statutory durable power of attorney, the
12-18 language conferring authority with respect to retirement plan
12-19 transactions empowers the attorney in fact or agent to do any
12-20 lawful act the principal may do with respect to a transaction
12-21 relating to a retirement plan, including to:
12-22 (1) apply for service or disability retirement
12-23 benefits;
12-24 (2) select payment options under any retirement plan
12-25 in which the principal participates, including plans for
13-1 self-employed individuals;
13-2 (3) designate or change the designation of a
13-3 beneficiary or benefits payable by a retirement plan, except that
13-4 an attorney in fact or agent may be named a beneficiary only to the
13-5 extent the attorney in fact or agent was a named beneficiary under
13-6 the retirement plan before the durable power of attorney was
13-7 executed;
13-8 (4) make voluntary contributions to retirement plans
13-9 if authorized by the plan;
13-10 (5) exercise the investment powers available under any
13-11 self-directed retirement plan;
13-12 (6) make "rollovers" of plan benefits into other
13-13 retirement plans;
13-14 (7) borrow from, sell assets to, and purchase assets
13-15 from retirement plans if authorized by the plan;
13-16 (8) waive the right of the principal to be a
13-17 beneficiary of a joint or survivor annuity if the principal is a
13-18 spouse who is not employed;
13-19 (9) receive, endorse, and cash payments from a
13-20 retirement plan;
13-21 (10) waive the right of the principal to receive all
13-22 or a portion of benefits payable by a retirement plan; and
13-23 (11) request and receive information relating to the
13-24 principal from retirement plan records.
13-25 (b) In this section, "retirement plan" means:
14-1 (1) an employee pension benefit plan as defined by
14-2 Section 1002, Employee Retirement Income Security Act of 1974
14-3 (ERISA) (29 U.S.C. Section 1002), without regard to the provisions
14-4 of Section (2)(B) of that section;
14-5 (2) a plan that does not meet the definition of an
14-6 employee benefit plan under ERISA because the plan does not cover
14-7 common law employees;
14-8 (3) a plan that is similar to an employee benefit plan
14-9 under ERISA, regardless of whether it is covered by Title I of
14-10 ERISA, including a plan that provides death benefits to the
14-11 beneficiary of employees; and
14-12 (4) an individual retirement account or annuity or a
14-13 self-employed pension plan or similar plan or account.
14-14 SECTION 7. Subsection (c), Section 490, Durable Power of
14-15 Attorney Act (Section 481 et seq., Texas Probate Code), is
14-16 repealed.
14-17 SECTION 8. This Act takes effect September 1, 1997, and
14-18 applies only to a durable power of attorney or statutory durable
14-19 power of attorney that is executed on or after that date. A
14-20 durable power of attorney or statutory durable power of attorney
14-21 that is executed before the effective date of this Act is governed
14-22 by the law in effect on the date the power of attorney was
14-23 executed, and the former law is continued in effect for that
14-24 purpose.
14-25 SECTION 9. The importance of this legislation and the
15-1 crowded condition of the calendars in both houses create an
15-2 emergency and an imperative public necessity that the
15-3 constitutional rule requiring bills to be read on three several
15-4 days in each house be suspended, and this rule is hereby suspended.