Do Basic Statutory Forms Address Broad Legal Needs?

This column first appeared in the San Antonio Express-News and other Hearst Newspapers on July 2, 2018. 

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Dear Mr. Premack: Situation: I have been divorced from Robert for over twenty years. We share an adult son, are very civil to each other, and I even still own a fifty-percent share of the house we had before the divorce. Robert now has dementia and needs to live in a memory care facility. About ten years ago, Robert asked if I would be Agent in his statutory Durable Power of Attorney. He downloaded the state’s basic form and signed it with a notary. I would like to protect the house from any reimbursement claim from Medicaid, and be sure that our son gets Robert’s half interest when he dies. Can I as Robert’s Agent sign for him a Lady Bird Deed like you have written about? – P.K.

Your situation is unusual in that ex-spouses do not usually trust each other enough to co-own a house and act as Agent under a Durable Power of Attorney. In fact, Texas law provides that divorce automatically ends the ex-spouse’s status under pre-divorce Powers of Attorney and voids any rights granted to the ex-spouse under a pre-divorce Will. However, there is no restriction on renewing those legal ties after the divorce is final, which is what you and your ex-husband thought you did when he named you as Agent in that downloaded form.

Now you face the challenge that your ex-husband has dementia, needs nursing home care, and that the house you co-own may be at risk. If he qualifies for Medicaid, the state has the right after he dies to make a claim to recover the money it spends caring for him. His half of the house is at risk, and in the worst case scenario the house could be forced into sale. Your half value would still go to you, but his half would be paid to the state instead of to your son as he wishes.

You have read some of my past columns which discuss using a Lady Bird Deed to protect homestead property from Medicaid’s estate recovery process. Can you, as his Agent, sign the Lady Bird Deed for him?

It depends entirely on the extent of the powers which were granted to you in his Statutory Durable Power of Attorney. You said that his Statutory Durable Power of Attorney is the state’s basic form which he downloaded and signed with a notary. Did he also do his own dentistry? If he needed surgery, would he have used a home surgical kit he got online? Unlikely. So why would anyone think a downloaded form would be adequate to address all future legal and financial situations? You go to a specialized doctor for medical treatment, and you go to a specialized lawyer to address legal needs.

When the legislature structured the statutory form power of attorney, they included basic powers. The statutory form is not, however, a general power of attorney conferring broad or unlimited power to the Agent. In fact, the legislature recently modified the statute to recognize that specialized powers can be delegated to the Agent, and that those specialized powers are not contained in the basic statutory form.

An Agent can only exercise the powers which are specified in the Durable Power of Attorney. Since your ex-husband did a DIY power of attorney, he did not grant you power to alter his estate plan, to establish a remainder interest for your son, or to divest him of rights in his home. In my opinion, the basic statutory form power of attorney does not authorize the Agent to sign a Lady Bird Deed for the principal. Broad powers are granted only when the Durable Power of Attorney is written to include broad authorization. His use of the limited statutory form saved a few dollars in legal costs up-front, but its inadequacies are going to cost him far more. People: take the time and spent a few dollars to work with a Certified Elder Law Attorney so you won’t face the same losses as Robert, his ex-wife, and their son will face.

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.

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