A durable power of attorney is a normal part of an estate plan. Yet, when a need to revoke a durable power of attorney arises, the “principal” (i.e. the person who gave the power of attorney to his agent) should do more than simply demand a return of the document. More is required because third parties who rely on the agent’s authority under the power of attorney aren’t liable to the principal unless they have “actual knowledge” that the agent’s authority has been revoked. The requirement for “actual knowledge” is established in the Texas Estates Code Section 751.058. Thus, there is a set of minimum actions that a prudent person should take when revoking a power of attorney, as follows:
- Send, by certified mail/return receipt requested, a letter that notifies the agent that the principal has terminated his authority under the power of attorney. The principal should demand the agent return the original power of attorney document and all copies.
- File an Affidavit that verifies the principal revoked the named-agent’s authority under the power of attorney in the official records of each county where the principal owns real property. While the act of filing itself merely constitutes “constructive notice,” the filing increases the chances that entities such as banks and title companies will receive actual notice during routine record searches.
- Send, by certified mail/return receipt requested, a copy of the affidavit with a cover letter requesting written confirmation of receipt to each financial institution with which the principal does business (e.g. banks, stock brokers, retirement fund managers, etc.). Written confirmation documents that actual notice occurred.
- Demand the agent provide the principal with an accounting of all actions the agent took on behalf of the principal under the power of attorney. This demand can be added to the revocation letter sent in step one.
My next blog post will take a closer look at what constitutes a proper accounting. Stay tuned.
Special Notice: This information is provided for educational purposes only and does not constitute legal advice. Principals wishing to revoke a power of attorney should discuss the unique factors of their situation with a qualified attorney before taking action.
Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm. The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.