Texas 2023 - 88th Regular

Texas Senate Bill SB1650 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	S.B. No. 1650
2	2
3	3
4	4	AN ACT
5	5	relating to durable powers of attorney and the construction of
6	6	certain powers conferred in those durable powers of attorney.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Section 751.002(5), Estates Code, is amended to
9	9	read as follows:
10	10	(5) "Principal" means an adult individual [person] who
11	11	signs or directs the signing of the individual's [person's] name on
12	12	a power of attorney that designates an agent to act on the
13	13	individual's [person's] behalf.
14	14	SECTION 2. Section 751.00201, Estates Code, is amended to
15	15	read as follows:
16	16	Sec. 751.00201. MEANING OF DISABLED OR INCAPACITATED FOR
17	17	PURPOSES OF DURABLE POWER OF ATTORNEY. Unless otherwise defined by
18	18	a durable power of attorney, an individual [a person] is considered
19	19	disabled or incapacitated for purposes of the durable power of
20	20	attorney if a physician certifies in writing at a date later than
21	21	the date the durable power of attorney is executed that, based on
22	22	the physician's medical examination of the individual [person], the
23	23	individual [person] is determined to be mentally incapable of
24	24	managing the individual's [person's] financial affairs.
25	25	SECTION 3. Section 751.133, Estates Code, is amended by
26	26	amending Subsection (a) and adding Subsection (a-1) to read as
27	27	follows:
28	28	(a) If, after execution of a durable power of attorney, a
29	29	court [of the principal's domicile] appoints a:
30	30	(1) permanent guardian of the estate for a ward who is
31	31	[of] the principal who executed the power of attorney, on the
32	32	qualification of the guardian the powers and authority granted to
33	33	[of] the agent named in the power of attorney are automatically
34	34	revoked unless the court enters an order that the powers of the
35	35	agent be suspended during the pendency of the guardianship of the
36	36	estate; or
37	37	(2) temporary guardian of the estate for a ward who is
38	38	the principal who executed the power of attorney, on the
39	39	qualification of the guardian the powers and authority granted to
40	40	the agent named in the power of attorney are automatically
41	41	suspended for the duration of the guardianship unless the court
42	42	enters an order that:
43	43	(A) affirms and states the effectiveness of the
44	44	power of attorney; and
45	45	(B) confirms the validity of the appointment of
46	46	the named agent [terminate on the qualification of the guardian of
47	47	the estate].
48	48	(a-1) If the powers and authority of an [The] agent are
49	49	revoked as provided by Subsection (a), the agent shall:
50	50	(1) deliver to the guardian of the estate all assets of
51	51	the ward's [incapacitated person's] estate that are in the
52	52	possession of the agent; and
53	53	(2) account to the guardian of the estate as the agent
54	54	would account to the principal if the principal had terminated the
55	55	powers of the agent.
56	56	SECTION 4. Section 751.251, Estates Code, is amended by
57	57	amending Subsection (a) and adding Subsection (d) to read as
58	58	follows:
59	59	(a) The following may bring an action requesting a court to
60	60	construe, or determine the validity or enforceability of, a durable
61	61	power of attorney, or to review an agent's conduct under a durable
62	62	power of attorney and grant appropriate relief:
63	63	(1) the principal or the agent;
64	64	(2) a guardian, conservator, or other fiduciary acting
65	65	for the principal;
66	66	(3) a person named as a beneficiary to receive
67	67	property, a benefit, or a contractual right on the principal's
68	68	death;
69	69	(4) a governmental agency with [regulatory] authority
70	70	to provide protective services to the principal [protect the
71	71	principal's welfare]; and
72	72	(5) a person who demonstrates to the court sufficient
73	73	interest in the principal's welfare or estate.
74	74	(d) In an action brought under this section, the court may
75	75	award costs and reasonable and necessary attorney's fees in an
76	76	amount the court considers equitable and just.
77	77	SECTION 5. Section 752.001(a), Estates Code, is amended to
78	78	read as follows:
79	79	(a) An individual [A person] may use a statutory durable
80	80	power of attorney to grant an [attorney in fact or] agent powers
81	81	with respect to an individual's [a person's] property and financial
82	82	matters.
83	83	SECTION 6. Section 752.107, Estates Code, is amended to
84	84	read as follows:
85	85	Sec. 752.107. BUSINESS OPERATION TRANSACTIONS. Subject to
86	86	the terms of an agreement or other document governing or relating to
87	87	an entity or entity ownership interest, to the extent the agent is
88	88	permitted by law to act for the principal and unless the power of
89	89	attorney provides otherwise, the [The] language conferring
90	90	authority with respect to business operating transactions in a
91	91	statutory durable power of attorney empowers the [attorney in fact
92	92	or] agent to:
93	93	(1) operate, buy, sell, enlarge, reduce, or terminate
94	94	an ownership [a business] interest;
95	95	(2) [do the following, to the extent that an attorney
96	96	in fact or agent is permitted by law to act for a principal and
97	97	subject to the terms of a partnership agreement:
98	98	[(A)] perform a duty or[,] discharge a liability,
99	99	or exercise in person or by proxy a right, power, privilege, or
100	100	option that the principal has, may have, or claims to have [under
101	101	the partnership agreement, whether or not the principal is a
102	102	general or limited partner];
103	103	(3) [(B)] enforce the terms of an agreement or other
104	104	document governing or relating to an entity or entity ownership
105	105	interest [the partnership agreement by litigation, action, or
106	106	otherwise]; [and]
107	107	(4) [(C)] defend, submit to arbitration, settle, or
108	108	compromise litigation or an action to which the principal is a party
109	109	because of an entity ownership interest [membership in the
110	110	partnership];
111	111	(5) [(3)] exercise in person or by proxy, or enforce
112	112	by litigation, action, or otherwise, a right, power, privilege, or
113	113	option the principal has or claims to have as the holder of a
114	114	certificated or uncertificated ownership interest;
115	115	(6) [bond, share, or other similar instrument and]
116	116	defend, submit to alternative dispute resolution [arbitration],
117	117	settle, or compromise litigation [a legal proceeding] to which the
118	118	principal is a party concerning a certificated or uncertificated
119	119	ownership interest [because of a bond, share, or similar
120	120	instrument];
121	121	(7) [(4)] with respect to a business or entity owned
122	122	solely by the principal:
123	123	(A) continue, modify, renegotiate, extend, and
124	124	terminate a contract made by or on behalf of the principal with
125	125	respect to the business or entity [before execution of the power of
126	126	attorney with an individual, legal entity, firm, association, or
127	127	corporation by or on behalf of the principal with respect to the
128	128	business];
129	129	(B) determine:
130	130	(i) the location of the business's or
131	131	entity's operation;
132	132	(ii) the nature and extent of the business;
133	133	(iii) the methods of manufacturing,
134	134	selling, merchandising, financing, accounting, and advertising
135	135	employed in the business's or entity's operation;
136	136	(iv) the amount and types of insurance
137	137	carried; and
138	138	(v) the method of engaging, compensating,
139	139	and dealing with the business's or entity's employees and
140	140	accountants, attorneys, or [and] other agents [and employees];
141	141	(C) change the name or form of organization under
142	142	which the business or entity is operated and enter into an [a
143	143	partnership] agreement with other persons [or organize a
144	144	corporation] to take over all or part of the operation of the
145	145	business or entity; and
146	146	(D) demand and receive money due or claimed by
147	147	the principal or on the principal's behalf in the operation of the
148	148	business or entity and control and disburse the money in the
149	149	operation of the business or entity;
150	150	(8) [(5)] put additional capital into a business or
151	151	entity in which the principal has an interest;
152	152	(9) [(6)] join in a plan of reorganization,
153	153	consolidation, interest exchange, conversion, or merger of the
154	154	business or entity;
155	155	(10) [(7)] sell or liquidate a business or entity or
156	156	all or part of the assets of the business or entity [at the time and
157	157	on the terms that the attorney in fact or agent considers
158	158	desirable];
159	159	(11) [(8)] establish the value of a business or entity
160	160	under a buy-out agreement to which the principal is a party;
161	161	(12) [(9) do the following:
162	162	[(A)] prepare, sign, file, and deliver reports,
163	163	compilations of information, returns, or other papers with respect
164	164	to a business or entity and[:
165	165	[(i) that are required by a governmental
166	166	agency, department, or instrumentality; or
167	167	[(ii) that the attorney in fact or agent
168	168	considers desirable; and
169	169	[(B)] make related payments; and
170	170	(13) [(10)] pay, compromise, or contest taxes or
171	171	assessments and perform any other act [that the attorney in fact or
172	172	agent considers desirable] to protect the principal from illegal or
173	173	unnecessary taxation, fines, penalties, or assessments with
174	174	respect to a business or entity, including attempts to recover, in
175	175	any manner permitted by law, money paid before or after the
176	176	execution of the power of attorney.
177	177	SECTION 7. Section 240.008, Property Code, is amended by
178	178	amending Subsection (c) and adding Subsection (c-1) to read as
179	179	follows:
180	180	(c) Except as provided by Subsection (c-1), the [The]
181	181	following disclaimers by a fiduciary acting in a fiduciary capacity
182	182	are not effective unless approved by a court of competent
183	183	jurisdiction:
184	184	(1) a disclaimer by a personal representative who is
185	185	not an independent administrator or independent executor;
186	186	(2) a disclaimer by the trustee of a management trust
187	187	created under Chapter 1301, Estates Code;
188	188	(3) a disclaimer by the trustee of a trust created
189	189	under Section 142.005; or
190	190	(4) a disclaimer that would result in an interest in or
191	191	power over property passing to the person making the disclaimer.
192	192	(c-1) A disclaimer described by Subsection (c)(4) does not
193	193	require court approval if the disclaimer is authorized under
194	194	Subtitle P, Title 2, Estates Code.
195	195	SECTION 8. The following sections of the Estates Code are
196	196	repealed:
197	197	(1) Section 751.052; and
198	198	(2) Section 751.133(b).
199	199	SECTION 9. Section 751.251, Estates Code, as amended by
200	200	this Act, applies to a proceeding concerning a durable power of
201	201	attorney pending on, or commenced on or after, the effective date of
202	202	this Act.
203	203	SECTION 10. Section 752.107, Estates Code, as amended by
204	204	this Act, applies only to a durable power of attorney, including a
205	205	statutory durable power of attorney, executed on or after the
206	206	effective date of this Act. A durable power of attorney, including a
207	207	statutory durable power of attorney, executed before the effective
208	208	date of this Act is governed by the law in effect on the date the
209	209	durable power of attorney was executed, and the former law is
210	210	continued in effect for that purpose.
211	211	SECTION 11. Section 240.008, Property Code, as amended by
212	212	this Act, applies only to a disclaimer made on or after the
213	213	effective date of this Act. A disclaimer made before the effective
214	214	date of this Act is governed by the law in effect at the time the
215	215	disclaimer was made, and the former law is continued in effect for
216	216	that purpose.
217	217	SECTION 12. This Act takes effect September 1, 2023.
218	218	______________________________ ______________________________
219	219	President of the Senate Speaker of the House
220	220	I hereby certify that S.B. No. 1650 passed the Senate on
221	221	April 20, 2023, by the following vote: Yeas 31, Nays 0.
222	222	______________________________
223	223	Secretary of the Senate
224	224	I hereby certify that S.B. No. 1650 passed the House on
225	225	May 11, 2023, by the following vote: Yeas 130, Nays 3, two
226	226	present not voting.
227	227	______________________________
228	228	Chief Clerk of the House
229	229	Approved:
230	230	______________________________
231	231	Date
232	232	______________________________
233	233	Governor