San Antonio, Texas (210) 826-1122
Bellevue, Washington (425) 296-2919



PAUL PREMACK, JD, CELA*
8031 Broadway
San Antonio, TX 78209
*Licensed in Texas
BENJAMIN PREMACK, JD** 
11900 NE 1st Street
Bellevue, WA  98005
**Licensed in Washington State & Colorado


San Antonio Probate, San Antonio Estate Planning, San Antonio Elder Law

 

San Antonio Express-News
October 1, 1999

Was "Springing" Power of Attorney Valid before 1993?

© 1989-2004, Paul Premack

expressBanner2.jpg (3631 bytes)

Dear Mr. Premack: About 10 years ago, my aunt signed a power of attorney naming me as her agent. She has always been in good health, and did not want me to do anything while she could take care of herself. So her power of attorney said that it "did not become effective until" she became disabled. A few months ago, she had a stroke, and is in a nursing home unable to speak or sign her name. I took the power of attorney to her bank, but they refuse to give me access to her account. They say that ten years ago, the kind of power of attorney she made was not legal in Texas so it is not legal today. Can you give me any guidance here? Shouldn’t my aunt’s wishes be followed? – C.M.

The power of attorney you speak of is called a "springing" power of attorney. A person creates it while still healthy, in anticipation that some day she may become disabled. When the disability occurs, the power of attorney "springs" into action so her agent can take care of her business.

Springing powers of attorney became expressly legal in Texas in 1993 when the Texas "Durable Power of Attorney Act" was created. That law specifically allows a power of attorney to say, "this power of attorney becomes effective on the disability or incapacity of the principal." In other words, it clearly allowed the type of power of attorney made by your aunt.

However, you said that your aunt’s power of attorney was about 10 years old, so it predates the Durable Power of Attorney Act. Earlier than 1993, lawyers were not at all certain that a springing power of attorney was legal in Texas. There was no law that said it was valid, but there was no law that said it was not valid.

A case decided by the Court of Appeals in Texarkana in August 1999 has laid that issue to rest. The case is Comerica Bank vs. Texas Commerce Bank, and it discusses the actions of a Mrs. Bradfield. She wrote a springing power of attorney in 1986. In 1995, she became disabled, and her agent transferred some of her assets into a trust with Comerica using the springing power of attorney.

In 1997, Mrs. Bradfield died and Texas Commerce was appointed as her Executor. The Executor wanted the assets moved back to her estate so the funds could be given to the heirs named in her Will. Comerica felt that the assets were 1) legally part of its trust, 2) should go to the trust’s beneficiaries, and 3) that using the springing power of attorney had been perfectly legal.

The court decided that while there was no explicit statute allowing springing powers of attorney, they were legal in 1985. Reviewing the law, the court recognized that it had been legal to make powers of attorney that commenced at some future time, for instance, "this power of attorney becomes valid when I "leave for Europe" or when I "buy a new business." If a power of attorney can be written that commences at some future date, then a power of attorney that starts "when I become disabled" was also legally valid.

As such, your aunt’s 10-year-old springing power of attorney is clearly legal and valid. I suggest you talk with one of the bank’s vice-presidents about the situation. Clear up their legal question and insist that they accept your authority.

Prior Column: Community Property Creation Agreement
Next Column:
Life Estate
Disclaimer: This column answers a specific legal question offered by an individual in the South Texas area. The answer may or may not match your individual situation. Be careful not to treat this column as specific legal advice that meets your individual needs. It may give you a solid basis for discussion with your own attorney. Also, please be aware that laws change. You should consult with your personal attorney before you take any action on this or any legal issue.

Submit Question or Comment

texscal.jpg (5258 bytes)

 

NOTICE: The fact that you read this website does not make you our client nor us your attorneys. The material and information on this website and associated blogs are provided strictly for informational purposes and are not legal advice. This site does not create an attorney-client relationship between our attorneys and the users of this site. Visitors to this site should consult a licensed attorney before taking any legal action.