Powers of attorney have become useful for disability planning, but only in recent years. Historically, if you wanted someone to manage your property when you could not, a revocable management trust was used. And if you forgot to do a trust, management required a court supervised guardianship, one of the most intrusive and expensive proceedings known to the law.
Powers of attorney were less than reliable because they terminated on disability. At common law, if the principal did not have the capacity to manage the agent, the power ended. Poof. Gone, just like that. When you needed help the most, the power of attorney failed.
It took an act of the Texas Legislature to improve matters. Effective January 1, 1972, the former Probate Code Section 36A permitted “durable” powers of attorney that remained effective even after disability. For the first time, private and inexpensive management of assets during disability was available without a trust.
At the time, durable powers of attorney were a novelty. Few other states allowed them, the local bank had never seen one, and if you asked the experts, Texas’ 1972 statute needed changes.
Probate Code Section 36A lasted until September 1993. The last four years were the worst. In order to serve you better, the legislator ruined it (my opinion) by requiring the power of attorney to be recorded where you resided. If you signed your power of attorney between August 28, 1989, and August 31, 1993, your attorney likely recorded it for you. Did you sign a power of attorney in 1993? Can you remember? I thought so. I can’t either.
It gets worse. If your power of attorney was recorded, and you later did a new power of attorney, did you record a revocation of the old one? If not, those old agents may still be in charge. In Harris County, search the Real Property records for powers of attorney and revocations.
Texas’ Statutory Durable Power of Attorney Act replaced Section 36A, effective September 1, 1993. With minor changes, the same form has been in place ever since, and it works well.
If your power of attorney was signed before 1972, you definitely need a new one. If your power of attorney was signed between August 28, 1989 and August 31, 1993, check the Real Property records where you lived then to confirm it was recorded. If not, instead of recording it, do a new one.
