The Texas Legislature passed, and the Governor has signed, a new act that creates new protections for vulnerable individuals. This impacts financial institutions, broker/dealers, and investment advisors. The Texas Legislature now requires employees to report suspected incidences of financial exploitation of vulnerable persons (those over 65 or those with disabilities) to their employers, and for the financial institution, security dealer, or financial adviser to similarly make reports to the Texas Department of Family and Protective Services. The financial institution, security dealer, or financial adviser also have the right to place a hold on any transaction where it suspects financial exploitation is occurring related to an account. The statutes require that a financial institution, security dealer, or financial adviser adopt internal policies, programs, plans, or procedures for: (1) employees to make the notification; and (2) the financial institution, security dealer, or financial adviser to conduct the assessment and submit the report.
The Texas Legislature has also recently instituted broad changes to the Texas Estates Code’s Texas Durable Power of Attorney Act. Due to customers’ frustration with financial institutions not accepting durable power of attorney documents, one aspect of the new statutory provisions is to make sure that financial institutions and other entities accept durable power of attorney documents with limited exceptions. Further, the statutory changes allow financial institutions to request English translations, agent certifications, and opinions of counsel to ensure that the use of the power of attorney document is valid. The statute also provides for new limited protections for financial institutions that accept power of attorney documents. The provisions also potentially allow broad additional powers to designated agents; powers that would even allow the agents to benefit themselves from the principal’s assets.
The Author will post a series of articles dealing with these new statutes and will host a webinar on September 26, 2017 at 10:00 a.m. CST where he will discuss these changes.