Originally published by Cleve Clinton.
Until September 1st, probably. Even after September 1st, LaTrina may still have problems.
Powers of Attorney can give others like LaTrina (agent) the right to do any legal acts that makers of the Powers of Attorney like John Drane (principal) could do for themselves. Yet, no one, not even banks and investment companies, has been required to honor it. Commonly, financial institutions, insurance companies, healthcare providers, car dealers and title companies, among others, prevent LaTrina, as agent, from acting unless the POA was executed on “their” form or signed a short time ago – often less than 3 years before presentment. The result? Effectively denying the expected and intended operation of the POA.
Effective September 1st, the Texas Legislature caught up with some 29 other states who have passed a comparable POA law and made substantive changes to the enforceability of POAs, affecting both those signed before and after the effective date. Now, a POA is presumed to be valid:
- if it is written, designates an agent, is signed by the principal and notarized;
- if executed and in compliance with that state’s law, even if executed in another state;
- even if a photocopy, faxed or e-mailed, a copy of an original POA has the same effect as the original and may be relied upon without liability.
Multiple agents may be named; each may exercise their authority unless the POA precludes them; and their now-expanded powers, if expressly authorized, can include: making gifts, creating or changing account beneficiary designations, delegating POA authority, creating or amending certain trusts and rights of survivorship. However, if these powers are granted, the agent may not act for his own benefit or that of his spouse or child, among others.
Fiduciary Duties
If you haven’t familiarized yourself with the fiduciary duty owed by an agent to its principal – such as the fiduciary duty owed to a principal by the POA agent – you are urged to do so. In short, a fiduciary duty is the highest duty known under the law. Its requirements and, arguably its penalties, are more stringent than the Golden Rule.
Additionally, the new POA statute may impose penalties for failure to honor a POA. When presented with a POA it must be accepted, subject to a request for the agent’s certification (see statutory form) or an opinion of counsel. Otherwise, the most telling circumstances permitting refusal of the POA are: the principal is not already a customer or the relationship is less than what the agent requests; the agent wishes to expand the customer relationship between the principal and the institution; there is a prohibitory state law or federal statute, rule or regulation; a suspicious activity report (SAR) filed with respect to the principal or agent; and a good faith belief the principal or agent has a prior criminal history involving financial crimes. Any refusal must be in writing and state the reasons for the refusal, failing which the penalty could be a court order and reimbursement for court costs and reasonable and necessary attorney’s fees.
Tilting the Scales in Your Favor
If you are the agent for a POA, take heart. Your power has returned. But also, beware. The duties and responsibilities of one acting as an agent under a Power of Attorney are not for the faint of heart. If you are a principal considering granting a POA, explore the additional now-available powers you might grant. Consider carefully to whom you grant these powers over your financial well-being.
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
from Texas Bar Today http://ift.tt/2it29qt
via Abogado Aly Website
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