Changes to the Texas Durable Power of Attorney Act and Form
by Katie Robinson, Associate Attorney
This year, the Texas Legislature revisited the Texas Durable Power of Attorney Act (the “Act), under Texas Estates Code Chapter 751. The result was major changes to the statute itself, as well as additional changes to the Statutory Durable Power of Attorney form provided in the Texas Estates Code, which took effect September 1, 2017.
Among the changes, the Act assigns some presumptions that were not originally granted under the law. For example, now if a Durable Power of Attorney lists co-agents, then it is presumed that the co-agents may act independently unless the document says otherwise. Further, copies of the power of attorney are effective as originals unless stated otherwise in the document, or if other laws require otherwise. The Act further limits financial institutions’ ability to refuse a power of attorney, unless the refusal fits into one of the eleven valid reasons granted under the statute. Some examples include actual knowledge that the power of attorney was revoked, conflicting instructions from co-agents, and a good faith belief that the agent or principal has a prior criminal history involving financial crimes. Under the Act, a financial institution may request a certificate from the agent or an attorney’s opinion regarding any matter of law concerning the form, or an English translation of any form wholly or partially not written in English.
Changes to the Statutory Durable Power of Attorney include an additional disclosure requiring the execution of the form in an attorney’s office, lender’s office, or title company’s office if the principal wants the agent to be able to execute a home equity loan on behalf of the principal, as well as additional standard authorities of an agent, such as authority over digital assets. The Act further identifies additional powers that the power of attorney must specifically grant if the principal want his agent to have such authority, including the authority of an agent to create or amend revocable trusts, give gifts, change rights of survivorship, and delegate authority to a another person.
Why is this Important?
Your power of attorney should be reviewed (and probably updated) if any of the following is true:
- You name co-agents, but your document does not specify whether they can act independently or must act jointly;
- You have named a person as your agent who is not your ancestor (parent, grandparent, etc.), spouse, or descendant (child, grandchild, etc.). This includes siblings, nieces and nephews, cousins, and all non-relatives;
- Your document does not grant the authority to make gifts, create trusts, etc., but you want it to;
- Your document does not grant your agent the right to compensation and you want it to (or it does allow for compensation, and you do not want it to);
- You have named an agent who has a criminal history, or who has been investigated for elder abuse or neglect to you or anyone else;
- You want your agent to be able to execute a home equity loan, but the document was not signed in an attorney’s, lender’s, or title company’s office; and
- As always, we recommend updating your power of attorney in the event that a primary or alternate agent has died or become incapacitated since you executed your document.
If you are an agent acting under someone else’s power of attorney, know that you are acting as a fiduciary and owe certain duties to the principal. If you have questions regarding your obligations under the power of attorney, you should consult with an attorney. Call Frank Leffingwell & Associates, PC at 512-246-3040.