Updates to the Texas Financial Power of Attorney
The Texas legislature created a standard, statutory form for the durable power of attorney. This is also known as a Financial Power of Attorney. This document, along with a Medical Power of Attorney, addresses circumstances when an individual is unable to make decisions for themselves. Individuals who execute these documents help their families avoid spending the time, money and energy to have a guardianship appointed. The financial and emotional cost savings can be tremendous.
Recently, the Texas legislature revised the statutory form to improve the effectiveness of the Financial Power of Attorney. Here are some noteworthy changes to the documents (which were presented at the 2018 Estate Planning, Guardianship and Elder Law Conference):
Estate Planning Powers – the Act now specifically authorizes a principal to grant an agent certain estate planning powers including the power to:
- create, amend, revoke or terminate an inter vivos trust,
- make gifts,
- create or change rights of survivorship,
- create or change a beneficiary designation (including a pay on death designation),
- delegate authority granted under the durable power of attorney.
Preserve the Principal’s Estate Plan an agent has a duty to preserve the principal’s estate plan so long as doing so is in the best interest of the principal. If an agent has been given any Estate Planning Powers, they should be especially mindful of this duty.
Duty to Notify of Breach – if the principal has named co-agents or has multiple financial power’s attorney, an agent must notify the principal of any breach of fiduciary duty by another agent. If the principal is incapacitated, the agent must take reasonable steps to protect the principal. It is important to note that the agent must be aware of any breach by another agent.
Power to Appoint Successors – Agents may now appoint successor agents, unless the document specifies otherwise. If the document lists other successor agents, then any appointed agents would serve after that list is exhausted.
Compensation – For powers of attorney signed after September 1, 2017, agents may now be entitled to reasonable compensation for their services