So you finally did it...
You finally quit procrastinating and were able to create your own Will Package.
You met with an attorney, put pen to paper, and safely created a plan for your future. Now what? As with anything, the law is constantly changing and evolving. In House Bill 1974 the 2017 Texas legislature passed a significant update to the Durable Power of Attorney Act, effective as of September 1, 2017.
What does that mean? This change greatly enhances the uses of a Statutory Durable Power of Attorney (“SDPOA”). Remember, the SDPOA is the document that allows you to name who you want to make your business and financial decisions in the event of incapacity or disability.
As we always suggest, if your SDPOA is more than a year old, consider reviewing it to see if these changes are worth updating.
Some benefits of this change include:
- A photocopy or computer scan of a SDPOA now has the same legal effect as the original document. Under prior law, copies were often rejected in favor of the original or of a certified copy. The new law does allow the Principal to limit or eliminate the use of copies by saying so in the original SDPOA. However, granting legal validity to copies makes using a SDPOA much easier when the bank, broker or other financial institution is far from home.
- Co-agents may be appointed by the Principal, who can act independently of each other unless the SDPOA states otherwise.
- The law now allows the Principal to select a person to appoint additional Successor Agents. For instance, if the Agent is your spouse and the Successor Agent is your daughter, you can give someone power to appoint another Successor Agent to act if your spouse and daughter both die, resign or become incapacitated.
- If allowed in the SDPOA, the Agent may delegate authority to others. For instance, the Agent could hire a bank to help pay bills, or could hire a property manager to handle rent property.
- If allowed in the SDPOA, the Principal can allow the Agent to create a Living Trust, to make gifts, or to handle beneficiary designations. However, if those powers are not expressly granted in the SDPOA the Agent does not have those powers.
- A financial institution can no longer “decide” to refuse to accept a SDPOA. Under the new law, a financial institution must now comply with a new set of procedures in order to refuse to accept a SDPOA.
There are additional changes that have been made under this new legislation, which are significant. We encourage everyone to meet with a qualified attorney to have a better understanding as to how the new SDPOA can affect your planning. Although the new legislation gives the agent more flexibility, each situation will be different. The SDPOA is not a “one size fits all.” You want to be sure your SDPOA is drafted for your particular situation.