Updated: Feb 4
Dear Mr. Premack: The Texas legislature is out of session for 2021. Did they pass any new laws that may influence my estate planning? – R.B.
In each legislative term, the State Bar of Texas makes recommendations to the legislature about new laws attorneys would like to have passed, and about modifications to estate planning and probate laws which will make the system work more smoothly. However, in this 2021 legislative session the recommended changes to the Estates Code did not pass the legislature. According to those who closely watch the proceedings, there were no substantive objections to the proposals. Rather, Lt. Gov. Patrick was upset that the Texas House leadership did not move fast enough on a few bills he favored so he retaliated by letting various bills approved by the House languish in the Senate.
Because of those maneuvers, we do not have any substantial updates to the state’s law on Financial Powers of Attorney, on Medical Directives, on Probate, on Wills, or on Trusts. The legislature did pass a few adjustments dealing with Guardianships which I won’t go into here.
There are, however, a few substantial bills which passed that may affect your estate planning:
Rule Against Perpetuities expands to 300 years. The Rule Against Perpetuities is ancient estate planning law forbidding a trust to hold property forever (in perpetuity). Texas law has, for many decades, limited the timespan of trusts to “a life in being plus twenty-one years”. For example, if you set up a trust for your five-year-old granddaughter, it could last her lifetime plus twenty-one more years if you wanted the trust terms to apply to, for instance, her children. The new law, effective 9/1/21, will allow you to create a trust that can control assets for up to 300 years (except for real estate, which gets a new 100-year control limit). If you want to use this new expanded timespan in your own trust, contact me.
Financial abuse of elderly becomes a criminal offense. If a person who is in a position of trust or who owes a fiduciary duty to an elder is accused of abusing that position, they can be charged with a crime. This includes an Agent under a Durable Power of Attorney and even a court-appointed Guardian. If the “financial abuse” is less than $100 it is a Class B misdemeanor, $100 to $750 is a Class A misdemeanor, $750 to $2500 is a state jail felony, $2500 to $30,000 is a 3rd degree felony, $30,000 to $150,000 is a 2nd degree felony, and more than $150,000 it is a 1st degree felony. As most houses now are valued above $150,000 anyone who is managing someone else’s assets – like an adult child with power of attorney for the parents – risks severe criminal punishment for “wrongful taking, retention, or use of money or other property” including the “unauthorized sale or transfer” of the home. What does “unauthorized” mean? The new law does not define it. How about an adult child who lives in elderly mom’s house, but mom wants him to leave, and in refusing to move he intimidates or threatens mom? If an action is not expressly allowed by the owner, then the abuser is at risk of criminal prosecution.
Obtaining a signature inappropriately becomes a criminal offense. If Person A, with intent to defraud or harm Person B, causes Person B to sign any document affecting “property or service or the pecuniary interest” of Person B, and Person B has not given “effective consent” then Person A may be convicted of a misdemeanor to felony depending on the value involved. “Effective consent” does not exist if the signature was induced by deception or coercion or if the signor “by reason of advanced age is known… to have diminished capacity to make informed and rational decisions about the reasonable disposition of property”.
The Texas legislature tried to pass a bill making it more difficult for all Texans, including the elder community, to vote. The making voting more difficult bill is still in gestation, and they may try to pass it during a special session yet to be called. This is not a column about politics, but we must defend the right to vote. For more, read this story from the League of Women Voters.
Paul Premack is a Certified Elder Law Attorney, handling Wills and Trusts, Probate, and Elder Law issues. He is licensed to practice law in Texas and Washington.
June 11, 2021