San Antonio Express-News
May 6, 2003

Is Agent Liable?

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Living Trust Travels Well

copyright 2003, Paul Premack

There are all sorts of legal issues presented by your situation. Was your mother acting fraudulently when she authorized use of your father’s credit card? Is the other family member defrauding your father by charging to his account without proper permission, or even committing theft by deception against the credit card company?

According to your letter, your father cannot be aware that these charges were made in his name but he is liable for them unless they are reported to the credit card company as fraud. As his agent, you are his assistant and have authority to do any act that he could do. So if you report the charges as fraud then his liability may be limited.

You are not personally liable for the debt unless you personally sign a contract agreeing to pay. The power to act for your father as agent does not impose personal liability on you for his obligations. If this bill gets paid, it must be either out of the other family member’s money, your mother’s money or your father’s money – but your own pocketbook is not exposed to this debt.

Dear Mr. Premack: My husband and I have a Living Trust that was prepared for us in Minnesota where we spend most summers.  Is this Living Trust legal in the State of Texas where we are legal residents, or does it need further work? – T.E.L. via Email

If your living trust document was signed properly under Minnesota law and you have turned ownership of some asset to the trust, then it is also valid in Texas. Texas and most states have very flexible trust laws to allow trusts to easily cross state lines.

Even though the trust is legally valid in Texas, you may need to do so fine tuning to make it efficient under Texas law. For instance, Minnesota law certainly does not address issues on community property, and will not properly handle issues dealing with Texas homestead rights and local property taxes. Thus, you should take the Minnesota trust to a Texas estate planning or elder law attorney so that provisions can be added to accommodate the different concepts in Texas law.

Although the trust is valid in Texas, many of the ancillary documents created with the trust should definitely be modified to work better under Texas law. For instance, the Last Will and Testament you have which backs up the trust is very sensitive to its state of origin. Texas and Minnesota have very different probate laws, and even though one purpose of the living trust is to avoid probate, you do want your contingency plan to be legally enforceable. You should also have a Texas attorney review your powers of attorney and medical directives for validity under Texas law.