The Durable Power of Attorney Act was amended to take effect September 1, 1997. As part of the new law, the "durability" of the Power of Attorney is lessened by one new provision, and a new, although similar, statutory durable power of attorney form is provided.

Current law allows that a durable power of attorney is terminated generally upon the death of the principal or the qualification of a guardian of the estate of the principal or by revocation by the principal of the power of attorney. The law has been amended to reflect that in the event of a principal’s divorce or annulment from a spouse who is an attorney-in-fact under an existing power of attorney, the powers terminate.However, the law also provides that such revocation is not effective to terminate the agency relationship if the attorney-in-fact, agent or other person who, without the actual knowledge of the termination of the power, acts in good faith under or in reliance on the power. The law has been expanded to provide that effective September 1, 1997, the annulment of a marriage or divorce of the principal from a spouse who had been appointed the principal’s attorney-in-fact before the date the divorce or annulment was granted does not revoke or terminate the agency or the powers of attorney-in-fact if the person acts in good faith under or in reliance on the power.

Q: How is the statutory durable power of attorney form changed?

A: (i) The prior requirement of the social security number has been deleted. The social security number now no longer must be disclosed.(ii) Under the old form, a principal would initial each category of transactions for which he or she wanted to grant a power to and if no power was initialed, it was assumed all would be chosen. The form has been changed now to provide that it is presumed that all powers will be granted unless one or more of the categories are crossed out. To withhold a power of the principals must cross out each power withheld.(iii) The form now also has special instructions that allows the attorney-in-fact to apply the principal’s property to make gifts up to the annual exclusion amount provided by federal gift tax law (now $10,000.00 per year). In order for the power of gift to apply, the principal must initial that particular sentence.

Q: How has the springing power of appointment been improved?

A: The prior law first enacted the idea of a "springing power of an attorney" which would spring to life upon the principal’s disability or incapacity. The questions always was at what point would a principal be considered disabled or incapacitated for the purposes of unleashing the power? The new law provides a statutory definition of disabled or incapacitated which is now based on the written certification by a physician that the principal is mentally incapable of managing his or her financial affairs.

The statute contains the revised form of Statutory durable Power of Attorney, a copy of which is attached.

If you have any questions concerning the new laws, please contact one of our attorneys.

STATUTORY DURABLE POWER OF ATTORNEY

NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING. THEY ARE EXPLAINED IN THE durable POWER OF ATTORNEY ACT, CHAPTER XII, TEXAS PROBATE CODE. IF YOU HAVE ANY QUESTIONS ABOUT THESE POWERS, OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES NOT AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU LATER WISH TO DO SO.

I,                                , appoint                                              as my agent (attorney-in-fact) to act for me in any lawful way with respect to all of the following powers except for a power that I have crossed out below.

TO WITHHOLD A POWER, YOU MUST CROSS OUT EACH POWER WITHHELD.

Real property transactions;
Tangible personal property transactions;
Stock and bond transactions;
Commodity and option transactions;
Banking and other financial institution transactions;
Business operating transactions;
Insurance and annuity transactions;
Estate, trust, and other beneficiary transactions;
Claims and litigation;
Personal and family maintenance Benefits from social security, Medicare, Medicaid, or other governmental programs or civil or military service;
Retirement plan transactions;
Tax matters.

IF NO POWER LISTED ABOVE IS CROSSED OUT, THIS DOCUMENT SHALL BE CONSTRUED AND INTERPRETED AS A GENERAL POWER OF ATTORNEY AND MY AGENT (ATTORNEY-IN-FACT) SHALL HAVE THE POWER AND AUTHORITY TO PERFORM OR UNDERTAKE ANY ACTION I COULD PERFORM OR UNDERTAKE IF I WERE PERSONALLY PRESENT.

SPECIAL INSTRUCTIONS:Special instructions applicable to gifts (initial in front of the following sentence to have it apply):

I grant my agent (attorney-in-fact) the power to apply my property to make gifts, except that the amount of a gift to an individual may not exceed the amount of annual exclusions allowed from the federal gift tax for the calendar year of the gift.

ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL INSTRUCTIONS LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.

UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS EFFECTIVE IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.

CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY CROSSING OUT THE ALTERNATIVE NOT CHOSEN:

(A)  This power of attorney is not affected by my subsequent disability or incapacity.

(B)  This power of attorney becomes effective upon my disability or incapacity.

YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF ATTORNEY IS TO BECOME EFFECTIVE ON THE DATE IT IS EXECUTED.IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE ASSUMED THAT YOU CHOSE ALTERNATIVE (A).

If Alternative (B) is chosen and a definition of my disability or incapacity is not contained in this power of attorney, I shall be considered disabled or incapacitated for purposes of this power of attorney if a physician certifies in writing at a date later than the date this power of attorney is executed that, based on the physician's medical examination of me, I am mentally incapable of managing my financial affairs. I authorize the physician who examines me for this purpose to disclose my physical or mental condition to another person for purposes of this power of attorney. A third party who accepts this power of attorney is fully protected from any action taken under this power of attorney that is based on the determination made by a physician of my disability or incapacity.

I agree that any third party who receives a copy of this document may act under it. Revocation of the durable power of attorney is not effective as to a third party until the third party receives actual notice of the revocation. I agree to indemnify the third party for any claims that arise against the third party because of reliance on this power of attorney.If any agent named by me dies, becomes legally disabled, resigns, or refuses to act, I name the following (each to act alone and successively, in the order named) as successor(s) to that agent:                                                               .

Signed this ______ day of __________, 20___.

Name:

THE STATE OF TEXAS               §

COUNTY OF                                §

This instrument was acknowledged before me on the                     day of                , 20      by                                                 .

THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR ACTING UNDER THE APPOINTMENT, ASSUMES THE FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT.