Powers of Attorney in Texas
Most people think estate planning is about what happens after they die. But some of the most important documents in your plan deal with what happens if you’re alive but unable to make decisions.
What Is a Power of Attorney?
A power of attorney (POA) is a legal document in which you authorize another person (the “agent” or “attorney-in-fact”) to act on your behalf. Depending on the type of POA, your agent may be able to manage your finances, pay your bills, handle real estate transactions, make investment decisions, and more.
In Texas, powers of attorney are primarily governed by the Texas Estates Code (Chapters 751–752) and Texas Health and Safety Code, (Chapter 166) and must meet specific execution requirements to be valid.
Common Types of Powers of Attorney
- Durable Power of Attorney (Financial)- This is the most common type used in estate planning and is also called a general durable power of attorney. This type of power of attorney can cover a wide range of matters. The word “durable” means the document remains effective even if you become disabled or incapacitated.
- A Texas Statutory Durable Power of Attorney follows a specific form set out in the Texas Estates Code. It can be broad (covering nearly all financial matters) or limited to specific acts or transactions.
- Non-Durable General Power of Attorney: This can cover a wide range of matters but, since it is a non-durable POA, it terminates automatically if you lose capacity.
- Limited or Special Power of Attorney: This limits the agent’s power to certain matters.
- Medical Power of Attorney: This document authorizes your agent to make health care decisions on your behalf if you are unable to do so. It is separate from your financial POA and is governed by the Texas Health & Safety Code.
- Directive to Physicians (Living Will): While not technically a power of attorney, this document, often called an advance directive or living will, lets you express your wishes about life-sustaining treatment if you are diagnosed with a terminal or irreversible condition. It works alongside your medical POA to ensure your health care wishes are known.
Potential Concerns with Not Having a Power of Attorney
If you become incapacitated without a durable power of attorney in place, your family may have no legal authority to manage your finances or make decisions on your behalf.
In that situation, a family member would typically need to go to court to be appointed your guardian or conservator. Guardianship proceedings in Texas can be lengthy, expensive, and emotionally draining. They also generally require ongoing court supervision.
Choosing an Agent
Choosing your agent is one of the most important decisions you’ll make. Your agent should be someone you trust completely, who is organized and responsible, and who understands your values and wishes. Common choices include a spouse, adult child, sibling, or close friend. You can also name a successor agent to step in if your first choice is unable to serve.
Granting someone power of attorney is a significant act of trust. Your agent has a legal duty (called a fiduciary duty) to act in your best interest, but the document still gives them substantial authority. Choose carefully and discuss your expectations openly.
Keeping Your Documents Current
A POA signed years ago may still be legally valid, but some financial institutions can be reluctant to honor older documents. It’s a good practice to review your POA periodically and re-execute it if necessary. Also, remember to update your agent designation if your circumstances change, for example, after a divorce, a death, or a falling out.
Ending the Power of Attorney
A POA ends when you revoke it, when you have specified an ending date, when the court appoints a guardian of your estate, or when you die. In cases where the power of attorney is not a durable power of attorney, it ends when you become incapacitated.
Conclusion
Powers of attorney are planning tools. An Estate Planning Attorney can help you draft documents that are properly executed, legally sound, and tailored to your specific needs.
DISCLAIMER: This blog post is for general informational/educational purposes only and does not constitute legal advice. Reading this post does not create an attorney-client relationship. Every situation is different, and you should consult with a qualified attorney about your particular circumstances. For the full disclaimer, click here.
