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