This column first appeared in the San Antonio Express News and other Hearst Newspapers on October 30, 2018.
Dear Mr. Premack: My father signed a Durable Power of Attorney about ten years ago, naming me as his Agent. For a long time, I didn’t need to do anything to help him, but now he is in a nursing home and is confused. I plan to sell his car, but the dealer is refusing to accept the power of attorney as-is. They say they want one of their own employees to be substituted as my father’s Agent so that they can sign any papers for him related to the car sale. What do you think about doing this? – D.B.
Historically, the purpose a Power of Attorney is to select an Agent (and ideally, successor Agents) to act in case you need assistance. Texas law on Powers of Attorney has evolved over the decades, the most recent large change dating to late 2017.
Your father named you as Agent in a Durable Power of Attorney which was signed in about 2008. It is possible, but highly unlikely, that the document specifically grants you authority to substitute a different person as Agent for your father, with you stepping aside. The clause is highly unlikely because:
- The statute behind Durable Powers of Attorney did not authorize such a delegation of authority,
- The authority granted to you was personal – meaning it was intended that your own personal judgement and discretion be utilized to assist your father, not someone else’s, and
- The legal concept of substitution , while it has been around for a long time, is not used very often. The Texas Supreme Court weighed-in on the issue in 1866, holding in Smith v Sublett that “the doctrine in relation to substitution is, that the authority is exclusively personal, unless from the express language used, or from their presumption growing out of the particular transactions, or of the usage of trade, a broader power was to be conferred upon the agent.”
As a consequence, you as Agent have no authority to sign a document which substitutes another person for you as your father’s Agent. The car dealer will have to find a different way to proceed.
In fact, when the law was changed in 2017, the legislature included two relevant concepts:
- A third party (like the car dealer) must either accept the Durable Power of Attorney or follow a strict procedure and have valid grounds before they can refuse the Durable Power of Attorney; and
- The principal (like your father) must specifically authorize the Agent (you) to delegate various actions to others. This is not, strictly speaking, a power of substitution – which would replace you with a different person altogether and for every purpose. It is a power of delegation – which allows you to remain as Agent but delegate certain tasks to others who may be able to accomplish them with more efficiency. Before this power can be invoked however, it must be authorized in a Durable Power of Attorney signed after the enactment of the new law. Hence, your father’s 2008 Durable Power of Attorney could not have included such a delegation of power.
The improvements which the 2017 law offer are significant. If you have an older Durable Power of Attorney, consider talking to your lawyer about making a new, updated document under the new law.
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.