Texas recently adopted much of the Uniform Power of Attorney
Act, resulting in a significant overhaul of the prior Texas power of attorney
statutes. A few of the more significant changes are:
Standing to Sue for POA Abuse: As discussed in the
October 2016 edition of this newsletter, standing to sue a fiduciary for misuse
of a power of attorney was previously limited. The new act considerably
broadens the persons who have standing to sue.
Increasing POA Acceptance: POAs are often ineffective
due to the reluctance of third parties to accept and rely on them. The new act
requires third parties to provide a specific, written reason for the refusal to
accept the POA, and creates a limited right to seek court intervention to force
the acceptance of a POA.
Estate Planning Powers: If desired by the principal
creating the POA, “hot powers” can be included that allow the agent holding the
POA to engage in estate planning activity for the principal such as creating
trusts, making gifts, and modifying account beneficiary designations.
Updated Statutory Form: There are modifications made
to the statutory durable POA form. Use of the statutory form is optional, but
there is a new statutory form for the medical POA that is mandatory.
Summary - Effective Date: The new act increases the
scope of POAs, takes steps to make POAs more widely accepted, and holds those
who abuse POAs more accountable. The effective date of the act is September 1,
2017, and it applies to POAs executed both before and after that date.
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