New Legislation Puts Power Behind Texas Durable Power of Attorney
Laws are constantly shifting and changing. Occasionally, it’s even for the better!
Estate planning attorneys gave a cheer last summer when the Texas Legislature passed a helpful law that transformed and revitalized the Texas Durable Power of Attorney.
In the past, banks, institutions, and other persons had not been required to accept or rely on Statutory Durable Powers of Attorney (DPOA) even if the DPOA presented to them was legally valid. Financial Institutions would often turn agents away because they had their “own” power of attorney forms. This posed a significant problem for elderly or mentally ill people who no longer had the capacity to sign a new DPOA (but did have capacity when the previous DPOA was signed). As a result, incapacitated adults (with valid powers of attorney) were sometimes forced into legal guardianships just so their loved ones could care for them.
Now, however, legislative changes effective as of September 1, 2017, create an affirmative obligation for financial institutions, corporations when they are presented with a valid, unexpired, unrevoked Texas Statutory Durable Power of Attorney.
Under Texas Estates Code § 751.201, when an agent named in a DPOA presents the Durable Power of Attorney with a request to accept it, the person or institution to whom it is presented has 10 days to exercise one of three options:
(1) accept the power of attorney by agreeing to act under it;
(2) request a certification from you relating to a factual matter concerning the principal, agent, or power of attorney; or
(3) request, in writing, the opinion of counsel on a legal concern regarding the power of attorney.
Under § 751.202, it is specifically prohibited for banks and other institutions or persons to reject a valid Durable Powers of Attorney in favor of a unique, additional, or different form of power of attorney.
An agent (under a power of attorney) now has the authority to sue for enforcement, under §751.212, to compel any financial institution, person, or corporate entity to accept a valid, Texas Durable Power of Attorney. And if such a suit were brought, the agent can recover all his attorney’s fees and costs of litigation if the agent prevails.
Also under § 751.202, it is now unlawful for a person or corporation to require that Durable Powers of Attorney be recorded in the real property records (with an exception for cases when recording is a legal requirement, such as for real estate transactions).
Absent “actual knowledge” that the DPOA is void, invalid, or has been terminated, a person to whom a DPOA is presented may rely, without liability, on the presumption that the DPOA is valid, that it gives the named agent authority to act, and that the agent’s actions are within the scope of powers granted in the Power of Attorney.
This legislation has promoted the Statutory Durable Power of Attorney from the ranks of “helpful” documents to that of vital documents. If you don’t have a Texas Durable Power of Attorney, now there is more reason than ever for you to make one. If you would like to take advantage of these exciting new laws, visit our law office today for a consultation. Let us help you direct, manage, and control who may / may not make decisions and act on your behalf, now and in the future.