What can be done to enforce a durable power of attorney?
Full Question:
Answer:
A Durable Power gives another person the right to do certain things for the maker of the Durable Power of Attorney (principal). What those things are depends upon what the Durable Power of Attorney says. A person giving a Durable Power of Attorney can make it very broad or can limit the Durable Power of Attorney to certain acts.
Normal Powers of Attorney terminate if and when the Principal becomes unable to act -- due, for example, to Alzheimer's disease. If a power of attorney terminates in such circumstances, powers of attorney would not be very useful to help people plan to have someone act for them if they are unable to act for themselves. It is precisely when persons can no longer do for themselves that a power of attorney is most valuable.
To remedy this inconsistency, the law created a "Durable Power of Attorney" that remains effective ("durable") even if a person becomes incapacitated. The only thing that distinguishes a Durable Power of Attorney from a regular Power of Attorney is special wording that states that the power survives the Principal's incapacity.
If a third party unreasonably refuses to accept the Power of Attorney, the law provides that that third party may be liable for any losses caused by the refusal as well as attorney's fees and court costs. The problem, however, can usually be resolved with a call from your attorney to the third party. In most cases, once the law is explained to the third party, the Power of Attorney is accepted.
Here is the relevant statutory section regarding annuity transactions:
§ 498. CONSTRUCTION OF POWER RELATING TO INSURANCE
TRANSACTIONS. In a statutory durable power of attorney, the
language conferring authority with respect to insurance and annuity
transactions empowers the attorney in fact or agent to:
(1) continue, pay the premium or assessment on, modify,
rescind, release, or terminate a contract procured by or on behalf
of the principal that insures or provides an annuity to either the
principal or another person, whether or not the principal is a
beneficiary under the contract;
(2) procure new, different, or additional contracts of
insurance and annuities for the principal or the principal's
spouse, children, and other dependents and select the amount, type
of insurance or annuity, and mode of payment;
(3) pay the premium or assessment on or modify, rescind,
release, or terminate a contract of insurance or annuity procured
by the attorney in fact or agent;
(4) designate the beneficiary of the contract, except that
an attorney in fact or agent may be named a beneficiary of the
contract or an extension, renewal, or substitute for the contract
only to the extent the attorney in fact or agent was named as a
beneficiary under a contract procured by the principal before
executing the power of attorney;
(5) apply for and receive a loan on the security of the
contract of insurance or annuity;
(6) surrender and receive the cash surrender value;
(7) exercise an election;
(8) change the manner of paying premiums;
(9) change or convert the type of insurance contract or
annuity with respect to which the principal has or claims to have a
power described in this section;
(10) change the beneficiary of a contract of insurance or
annuity, except that the attorney in fact or agent may be designated
a beneficiary only to the extent authorized by Subdivision (4) of
this section;
(11) apply for and procure government aid to guarantee or
pay premiums of a contract of insurance on the life of the
principal;
(12) collect, sell, assign, hypothecate, borrow on, or
pledge the interest of the principal in a contract of insurance or
annuity; and
(13) pay from proceeds or otherwise, compromise or contest,
or apply for refunds in connection with a tax or assessment levied
by a taxing authority with respect to a contract of insurance or
annuity or its proceeds or liability accruing because of the tax or
assessment.
Added by Acts 1993, 73rd Leg., ch. 49, § 1, eff. Sept. 1, 1993.
