This column first appeared in the San Antonio Express News on January 30, 2017.
Last week we looked at proposals in the 85th regular session of the Texas Legislature relating to financial accountability toward the elderly. The legislature will also entertain a variety of proposals which were formulated by the State Bar of Texas. Some of them do not yet have bill numbers, but will be introduced soon.
One proposal would repair a difficult situation under current law. Now, when a Durable Power of Attorney (DPOA) for financial matters is used, it is very routine that the original document must be presented. For instance, when an Agent seeks to use a DPOA to access a bank account, the bank will insist on seeing the original. When it is a local bank that may not be a problem, but if the bank is distant and they insist on see the original, there is risk that it could be lost in transit. The solution today is to file the DPOA with the county clerk, obtain a certified copy, and send the certified copy.
The proposal would amend the Estates Code to provide that a plain photocopy of a DPOA should be just as useful as the original. This would put DPOAs on the same footing as, for instance, Medical Powers of Attorney (for which the law has, for years, allowed use of a photocopy instead of the original document or a certified copy.)
A second proposal would cure a longstanding issue in current Texas law, which is that when a DPOA is presented there is no legal requirement that it be accepted and acted upon. For instance, if the Agent presents a DPOA to the bank, right now the bank may to tell the Agent to go away because they don’t like to accept powers of attorney. The proposal would require that a valid DPOA must be accepted by third parties (like banks) within 7 days after it is presented, unless the bank asks that it be certified by the Agent’s legal counsel in which case it must be accepted within 5 days after certification by counsel.
There are a variety of exceptions in the proposal, for instance, the bank could still refuse the DPOA if they know it has been revoked, if the Agent’s counsel refuses to provide a certificate, if the bank in good faith thinks the Agent is exceeding the authority granted by the DPOA, and others. If a DPOA is refused, the proposal would require a written notice specifying why it was refused, and would allow the Agent to sue for any damages that may result from the refusal.
If this proposal is approved and becomes law, DPOAs will become much more reliable. Principals will be assured that the Agent can fulfill the assigned duties, and Agents will cease to be confounded by arbitrary and unfounded refusals of DPOAs. Sadly, similar proposals made in past legislative sessions have been opposed by the banking and financial lobbies which have successful blocked enactment of the proposals.
A third proposal would add a new provision to the Estates Code to specifically allow appointment of Co-Agents in a DPOA. Currently there is nothing in the law forbidding Co-Agents, but also nothing specifically allowing them either. The proposal would allow Co-Agents to each act independently of the other unless the maker of the DPOA wants to require them to work jointly at all times.
Next week I’ll look into additional legislative proposals that may affect your long-term planning.
Paul Premack is a Certified Elder Law Attorney with offices in San Antonio and Seattle, handling Wills and Trusts, Probate, and Business Entity issues. View past legal columns or submit free questions on legal issues via www.TexasEstateandProbate.com or www.Premack.com.