A recent change requires third parties to accept the improved Texas durable power of attorney. Over the years, I have helped many Texans prepare for the impact of adverse financial contingencies by making sure they have a Texas durable power of attorney. There are many articles in my blog about the importance of this document.
Unfortunately clients have experienced the unfortunate situation when a third party refuses to honor a valid durable power of attorney. Until the arrival of the new Texas durable power of attorney, there was almost nothing the client could do. Banks and investment firms arbitrarily refused to honor a validly drafted and executed durable power of attorney. It is hard to estimate how many Texans have been forced into an unnecessary guardianship in order to gain access to their funds and property. Here is an excellent article on the hardship caused by these arbitrary refusals to honor a power of attorney.
The change in the law in Texas now requires third parties to accept the new Texas durable power of attorney.
How does the changes do away with arbitrary refusal to honor the power of attorney?
Now when a person (the principal) signs a Texas durable power of attorney to delegate to someone (the agent) the authority to conduct the principal’s financial business and it is presented to a third-party it now has 3 choices. These choices are (1) to accept it, (2) to request that the agent sign a certificate, or (3) to request the agent provide an opinion of counsel. The new law provides well defined time periods the third party has to use one its 3 choices. Failure to meet these time limits forfeits the third-party’s to refuse to honor the improved Texas durable power of attorney.
What options do Texas have when there is a refusal to honor the durable power of attorney?
The third-party can only refuse to accept this document for one of the 11 reasons set out in the statute. If the third-party refuses, then it has to give the agent a written Private Reason Affidavit, which is signed under penalty of perjury. If the third-party fails to timely give a Private Reason Affidavit, the agent or principal can sue for an order requiring that the document be accepted, plus their attorneys’ fees and court costs.
If you want to learn the details of this important new law, click here.
With this new Texas durable power of attorney, all Texas attorneys hope the days of the arbitrary refusal to honor a validly drafted and executed document are over. If you have questions about this new Texas durable power of attorney, call me. More importantly, if the date when you executed your document before September 1, 2017, call me and lets get you armed with the all powerful new Texas durable power of attorney.