1-1 By: Harris S.B. No. 620
1-2 (In the Senate - Filed February 17, 1997; February 20, 1997,
1-3 read first time and referred to Committee on Jurisprudence;
1-4 April 9, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 5, Nays 0; April 9, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 620 By: Harris
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to durable powers of attorney.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. The Durable Power of Attorney Act (Section 481 et
1-13 seq., Texas Probate Code) is amended by adding Section 485A to read
1-14 as follows:
1-15 Sec. 485A. EFFECT OF PRINCIPAL'S DIVORCE OR MARRIAGE
1-16 ANNULMENT IF FORMER SPOUSE IS ATTORNEY IN FACT OR AGENT. If, after
1-17 execution of a durable power of attorney, the principal is divorced
1-18 from a person who has been appointed the principal's attorney in
1-19 fact or agent or the principal's marriage to a person who has been
1-20 appointed the principal's attorney in fact or agent is annulled,
1-21 the powers of the attorney in fact or agent granted to the
1-22 principal's former spouse shall terminate on the date on which the
1-23 divorce or annulment of marriage is granted by a court, unless
1-24 otherwise expressly provided by the durable power of attorney.
1-25 SECTION 2. Section 486, Durable Power of Attorney Act
1-26 (Section 481 et seq., Texas Probate Code), is amended to read as
1-27 follows:
1-28 Sec. 486. KNOWLEDGE OF DEATH, GUARDIAN OF ESTATE, [OR]
1-29 REVOCATION, DIVORCE, OR MARRIAGE ANNULMENT; GOOD-FAITH ACTS.
1-30 (a) The revocation by, the death of, or the qualification of a
1-31 guardian of the estate of a principal who has executed a durable
1-32 power of attorney does not revoke or terminate the agency as to the
1-33 attorney in fact, agent, or other person who, without actual
1-34 knowledge of the termination of the power by revocation, by the
1-35 principal's death, or by the qualification of a guardian of the
1-36 estate of the principal, acts in good faith under or in reliance on
1-37 the power.
1-38 (b) The divorce of a principal from a person who has been
1-39 appointed the principal's attorney in fact or agent before the date
1-40 on which the divorce is granted or the annulment of the marriage of
1-41 a principal and a person who has been appointed the principal's
1-42 attorney in fact or agent before the date the annulment is granted
1-43 does not revoke or terminate the agency as to a person other than
1-44 the principal's former spouse if the person acts in good faith
1-45 under or in reliance on the power.
1-46 (c) Any action [so] taken under this section, unless
1-47 otherwise invalid or unenforceable, binds successors in interest of
1-48 the principal.
1-49 SECTION 3. Section 487, Durable Power of Attorney Act
1-50 (Section 481 et seq., Texas Probate Code), is amended to read as
1-51 follows:
1-52 Sec. 487. AFFIDAVIT OF LACK OF KNOWLEDGE OR TERMINATION OF
1-53 POWER; RECORDING; GOOD-FAITH RELIANCE. (a) As to acts undertaken
1-54 in good-faith reliance on the durable power of attorney, an
1-55 affidavit executed by the attorney in fact or agent under a durable
1-56 power of attorney stating that the attorney in fact or agent did
1-57 not have at the time of exercise of the power actual knowledge of
1-58 the termination of the power by revocation, by the principal's
1-59 death, by the principal's divorce or the annulment of the marriage
1-60 of the principal if the attorney in fact or agent was the
1-61 principal's spouse, or by the qualification of a guardian of the
1-62 estate of the principal is conclusive proof as between the attorney
1-63 in fact or agent and a person other than the principal or the
1-64 principal's personal representative dealing with the attorney in
2-1 fact or agent of the nonrevocation or nontermination of the power
2-2 at that time.
2-3 (b) As to acts undertaken in good-faith reliance on the
2-4 durable power of attorney, an affidavit executed by the attorney in
2-5 fact or agent under a durable power of attorney stating that the
2-6 principal is disabled or incapacitated, as defined by the power, is
2-7 conclusive proof as between the attorney in fact or agent and a
2-8 person other than the principal or the principal's personal
2-9 representative dealing with the attorney in fact or agent of the
2-10 disability or incapacity of the principal at that time.
2-11 (c) If the exercise of the power of attorney requires
2-12 execution and delivery of any instrument that is to be recorded, an
2-13 affidavit executed under Subsection (a) or (b) of this section,
2-14 when authenticated for record, may also be recorded.
2-15 (d) This section does not affect any provision in a durable
2-16 power of attorney for its termination by expiration of time or
2-17 occurrence of an event other than express revocation.
2-18 (e) When a durable power of attorney is used, a third party
2-19 who relies in good faith on the acts of an attorney in fact or
2-20 agent within the scope of the power of attorney is not liable to
2-21 the principal.
2-22 SECTION 4. Subsection (a), Section 490, Durable Power of
2-23 Attorney Act (Section 481 et seq., Texas Probate Code), is amended
2-24 to read as follows:
2-25 (a) The following form is known as a "statutory durable
2-26 power of attorney." A person may use a statutory durable power of
2-27 attorney to grant an attorney in fact or agent powers with respect
2-28 to a person's property and financial matters. A power of attorney
2-29 in substantially the following form has the meaning and effect
2-30 prescribed by this chapter. The validity of a power of attorney as
2-31 meeting the requirements of a statutory durable power of attorney
2-32 is not affected by the fact that one or more of the categories of
2-33 optional powers listed in the form are struck or the form includes
2-34 specific limitations on or additions to the attorney in fact's or
2-35 agent's powers.
2-36 [When a power in substantially the form set forth in this
2-37 chapter is used, third parties who rely in good faith on the acts
2-38 of the agent within the scope of the power may do so without fear
2-39 of liability to the principal.]
2-40 The following form is not exclusive, and other forms of power
2-41 of attorney may be used.
2-42 STATUTORY DURABLE POWER OF ATTORNEY
2-43 NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND
2-44 SWEEPING. THEY ARE EXPLAINED IN THE DURABLE POWER OF ATTORNEY ACT,
2-45 CHAPTER XII, TEXAS PROBATE CODE. IF YOU HAVE ANY QUESTIONS ABOUT
2-46 THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES
2-47 NOT AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE
2-48 DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU
2-49 LATER WISH TO DO SO.
2-50 I, __________ (insert your name and address), [my social
2-51 security number being __________ (insert your proper SS#),] appoint
2-52 __________ (insert the name and address of the person appointed) as
2-53 my agent (attorney-in-fact) to act for me in any lawful way with
2-54 respect to all of the following powers except for a power that I
2-55 have crossed out below.
2-56 TO WITHHOLD A POWER, YOU MUST CROSS OUT EACH POWER WITHHELD.
2-57 Real property transactions;
2-58 Tangible personal property transactions;
2-59 Stock and bond transactions;
2-60 Commodity and option transactions;
2-61 Banking and other financial institution transactions;
2-62 Business operating transactions;
2-63 Insurance and annuity transactions;
2-64 Estate, trust, and other beneficiary transactions;
2-65 Claims and litigation;
2-66 Personal and family maintenance;
2-67 Benefits from social security, Medicare, Medicaid, or
2-68 other governmental programs or civil or military service;
2-69 Retirement plan transactions;
3-1 Tax matters.
3-2 IF NO POWER LISTED ABOVE IS CROSSED OUT, THIS DOCUMENT SHALL
3-3 BE CONSTRUED AND INTERPRETED AS A GENERAL POWER OF ATTORNEY AND MY
3-4 AGENT (ATTORNEY IN FACT) SHALL HAVE THE POWER AND AUTHORITY TO
3-5 PERFORM OR UNDERTAKE ANY ACTION I COULD PERFORM OR UNDERTAKE IF I
3-6 WERE PERSONALLY PRESENT
3-7 [the following initialed subjects:]
3-8 [TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN
3-9 FRONT OF (N) AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS.]
3-10 [TO GRANT ONE OR MORE, BUT FEWER THAN ALL, OF THE FOLLOWING
3-11 POWERS, INITIAL THE LINE IN FRONT OF EACH POWER YOU ARE GRANTING.]
3-12 [TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN FRONT OF IT.
3-13 YOU MAY, BUT NEED NOT, CROSS OUT EACH POWER WITHHELD.]
3-14 [INITIAL]
3-15 [_______ (A) real property transactions;]
3-16 [_______ (B) tangible personal property transactions;]
3-17 [_______ (C) stock and bond transactions;]
3-18 [_______ (D) commodity and option transactions;]
3-19 [_______ (E) banking and other financial institution transactions;]
3-20 [_______ (F) business operating transactions;]
3-21 [_______ (G) insurance and annuity transactions;]
3-22 [_______ (H) estate, trust, and other beneficiary transactions;]
3-23 [_______ (I) claims and litigation;]
3-24 [_______ (J) personal and family maintenance;]
3-25 [_______ (K) benefits from social security, Medicare, Medicaid, or
3-26 other governmental programs or civil or military
3-27 service;]
3-28 [_______ (L) retirement plan transactions;]
3-29 [_______ (M) tax matters;]
3-30 [_______ (N) ALL OF THE POWERS LISTED IN (A) THROUGH (M). YOU
3-31 NEED NOT INITIAL ANY OTHER LINES IF YOU INITIAL LINE
3-32 (N)].
3-33 SPECIAL INSTRUCTIONS:
3-34 Special instructions applicable to gifts (initial in front of
3-35 the following sentence to have it apply):
3-36 I grant my agent (attorney in fact) the power to apply my
3-37 property to make gifts, except that the amount of a gift to an
3-38 individual may not exceed the amount of annual exclusions allowed
3-39 from the federal gift tax for the calendar year of the gift.
3-40 ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS
3-41 LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.
3-42 ___________________________________________________________________
3-43 ___________________________________________________________________
3-44 ___________________________________________________________________
3-45 ___________________________________________________________________
3-46 ___________________________________________________________________
3-47 ___________________________________________________________________
3-48 ___________________________________________________________________
3-49 ___________________________________________________________________
3-50 ___________________________________________________________________
3-51 ___________________________________________________________________
3-52 UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS
3-53 EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.
3-54 CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE
3-55 ALTERNATIVE NOT CHOSEN:
3-56 (A) This power of attorney is not affected by my
3-57 subsequent disability or incapacity.
3-58 (B) This power of attorney becomes effective upon my
3-59 disability or incapacity.
3-60 YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY
3-61 IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.
3-62 IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED
3-63 THAT YOU CHOSE ALTERNATIVE (A).
3-64 If Alternative (B) is chosen and a definition of my
3-65 disability or incapacity is not contained in this power of
3-66 attorney, I shall be considered disabled or incapacitated for
3-67 purposes of this power of attorney if a physician certifies in
3-68 writing at a date later than the date this power of attorney is
3-69 executed that, based on the physician's medical examination of me,
4-1 I am mentally incapable of managing my financial affairs. I
4-2 authorize the physician who examines me for this purpose to
4-3 disclose my physical or mental condition to another person for
4-4 purposes of this power of attorney. A third party who accepts this
4-5 power of attorney is fully protected from any action taken under
4-6 this power of attorney that is based on the determination made by a
4-7 physician of my disability or incapacity.
4-8 I agree that any third party who receives a copy of this
4-9 document may act under it. Revocation of the durable power of
4-10 attorney is not effective as to a third party until the third party
4-11 receives actual notice of the revocation. I agree to indemnify the
4-12 third party for any claims that arise against the third party
4-13 because of reliance on this power of attorney.
4-14 If any agent named by me dies, becomes legally disabled,
4-15 resigns, or refuses to act, I name the following (each to act alone
4-16 and successively, in the order named) as successor(s) to that
4-17 agent: __________.
4-18 Signed this ______ day of __________, 19___
4-19 __________________________________
4-20 (your signature)
4-21 State of _______________________
4-22 County of ______________________
4-23 This document was acknowledged before me on
4-24 __________________________(date) by _______________________________
4-25 (name of principal)
4-26 _________________________________
4-27 (signature of notarial officer)
4-28 (Seal, if any, of notary) ___________________________________
4-29 (printed name)
4-30 My commission expires: __________
4-31 THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR ACTING UNDER
4-32 THE APPOINTMENT, ASSUMES THE FIDUCIARY AND OTHER LEGAL
4-33 RESPONSIBILITIES OF AN AGENT.
4-34 SECTION 5. Section 492, Durable Power of Attorney Act
4-35 (Section 481 et seq., Texas Probate Code), is amended to read as
4-36 follows:
4-37 Sec. 492. CONSTRUCTION OF POWER RELATING TO REAL PROPERTY
4-38 TRANSACTIONS. In a statutory durable power of attorney, the
4-39 language conferring authority with respect to real property
4-40 transactions empowers the attorney in fact or agent without further
4-41 reference to a specific description of the real property to:
4-42 (1) accept as a gift or as security for a loan or
4-43 reject, demand, buy, lease, receive, or otherwise acquire an
4-44 interest in real property or a right incident to real property;
4-45 (2) sell, exchange, convey with or without covenants,
4-46 quitclaim, release, surrender, mortgage, encumber, partition,
4-47 consent to partitioning, subdivide, apply for zoning, rezoning, or
4-48 other governmental permits, plat or consent to platting, develop,
4-49 grant options concerning, lease or sublet, or otherwise dispose of
4-50 an estate or interest in real property or a right incident to real
4-51 property;
4-52 (3) release, assign, satisfy, and enforce by
4-53 litigation, action, or otherwise a mortgage, deed of trust,
4-54 encumbrance, lien, or other claim to real property that exists or
4-55 is claimed to exist;
4-56 (4) do any act of management or of conservation with
4-57 respect to an interest in real property, or a right incident to
4-58 real property, owned or claimed to be owned by the principal,
4-59 including power to:
4-60 (A) insure against a casualty, liability, or
4-61 loss;
4-62 (B) obtain or regain possession or protect the
4-63 interest or right by litigation, action, or otherwise;
4-64 (C) pay, compromise, or contest taxes or
4-65 assessments or apply for and receive refunds in connection with
4-66 them; [and]
4-67 (D) purchase supplies, hire assistance or labor,
4-68 or make repairs or alterations in the real property; and
4-69 (E) manage and supervise an interest in real
5-1 property, including the mineral estate, by, for example, entering
5-2 into a lease for oil, gas, and mineral purposes, making contracts
5-3 for development of the mineral estate, or making pooling and
5-4 unitization agreements;
5-5 (5) use, develop, alter, replace, remove, erect, or
5-6 install structures or other improvements on real property in which
5-7 the principal has or claims to have an estate, interest, or right;
5-8 (6) participate in a reorganization with respect to
5-9 real property or a legal entity that owns an interest in or right
5-10 incident to real property, receive and hold shares of stock or
5-11 obligations received in a plan or reorganization, and act with
5-12 respect to the shares or obligations, including:
5-13 (A) selling or otherwise disposing of the shares
5-14 or obligations;
5-15 (B) exercising or selling an option, conversion,
5-16 or similar right with respect to the shares or obligations; and
5-17 (C) voting the shares or obligations in person
5-18 or by proxy;
5-19 (7) change the form of title of an interest in or
5-20 right incident to real property; and
5-21 (8) dedicate easements or other real property in which
5-22 the principal has or claims to have an interest to public use, with
5-23 or without consideration.
5-24 SECTION 6. Section 503, Durable Power of Attorney Act
5-25 (Section 481 et seq., Texas Probate Code), is amended to read as
5-26 follows:
5-27 Sec. 503. CONSTRUCTION OF POWER RELATING TO RETIREMENT PLAN
5-28 TRANSACTIONS. (a) In a statutory durable power of attorney, the
5-29 language conferring authority with respect to retirement plan
5-30 transactions empowers the attorney in fact or agent to do any
5-31 lawful act the principal may do with respect to a transaction
5-32 relating to a retirement plan, including to:
5-33 (1) apply for service or disability retirement
5-34 benefits;
5-35 (2) select payment options under any retirement plan
5-36 in which the principal participates, including plans for
5-37 self-employed individuals;
5-38 (3) designate or change the designation of a
5-39 beneficiary or benefits payable by a retirement plan, except that
5-40 an attorney in fact or agent may be named a beneficiary only to the
5-41 extent the attorney in fact or agent was a named beneficiary under
5-42 the retirement plan before the durable power of attorney was
5-43 executed;
5-44 (4) make voluntary contributions to retirement plans
5-45 if authorized by the plan;
5-46 (5) exercise the investment powers available under any
5-47 self-directed retirement plan;
5-48 (6) make "rollovers" of plan benefits into other
5-49 retirement plans;
5-50 (7) borrow from, sell assets to, and purchase assets
5-51 from retirement plans if authorized by the plan;
5-52 (8) waive the right of the principal to be a
5-53 beneficiary of a joint or survivor annuity if the principal is a
5-54 spouse who is not employed;
5-55 (9) receive, endorse, and cash payments from a
5-56 retirement plan;
5-57 (10) waive the right of the principal to receive all
5-58 or a portion of benefits payable by a retirement plan; and
5-59 (11) request and receive information relating to the
5-60 principal from retirement plan records.
5-61 (b) In this section, "retirement plan" means:
5-62 (1) an employee pension benefit plan as defined by
5-63 Section 1002, Employee Retirement Income Security Act of 1974
5-64 (ERISA) (29 U.S.C. Section 1002), without regard to the provisions
5-65 of Section (2)(B) of that section;
5-66 (2) a plan that does not meet the definition of an
5-67 employee benefit plan under ERISA because the plan does not cover
5-68 common law employees;
5-69 (3) a plan that is similar to an employee benefit plan
6-1 under ERISA, regardless of whether it is covered by Title I of
6-2 ERISA, including a plan that provides death benefits to the
6-3 beneficiary of employees; and
6-4 (4) an individual retirement account or annuity or a
6-5 self-employed pension plan or similar plan or account.
6-6 SECTION 7. Subsection (c), Section 490, Durable Power of
6-7 Attorney Act (Section 481 et seq., Texas Probate Code), is
6-8 repealed.
6-9 SECTION 8. This Act takes effect September 1, 1997, and
6-10 applies only to a durable power of attorney or statutory durable
6-11 power of attorney that is executed on or after that date. A
6-12 durable power of attorney or statutory durable power of attorney
6-13 that is executed before the effective date of this Act is governed
6-14 by the law in effect on the date the power of attorney was
6-15 executed, and the former law is continued in effect for that
6-16 purpose.
6-17 SECTION 9. The importance of this legislation and the
6-18 crowded condition of the calendars in both houses create an
6-19 emergency and an imperative public necessity that the
6-20 constitutional rule requiring bills to be read on three several
6-21 days in each house be suspended, and this rule is hereby suspended.
6-22 * * * * *