Why Every Adult Should Have a Durable Power of Attorney in Texas

An estate plan helps to ensure that you, your family, and your finances are protected as much as possible. You cannot predict the future, but you can prepare yourself and your family. An estate plan is about more than merely writing a will. It should be comprehensive. In Texas, every adult should have a durable power of attorney. At SimpleLawTX, our Texas estate planning lawyers are committed to making estate planning easy and understandable and helping you get a durable power of attorney in place. 

What is a Durable Power of Attorney?

Broadly explained, a durable power of attorney is a legal document that allows you to appoint another person to manage certain financial and property matters on your behalf. 

In Texas, the person creating the document is called the principal, and the person receiving authority is called the agent or attorney-in-fact. The agent may be authorized to handle matters such as bank accounts, real estate, taxes, investments, business interests, and other financial transactions. 

What makes the power of attorney “durable” is that it can remain effective even if the principal later becomes incapacitated. Depending on how the document is drafted, the agent’s authority may begin immediately or only after the principal becomes incapacitated. 

Note: A durable power of attorney does not generally authorize medical decision-making. Texas uses separate documents, such as a medical power of attorney, for health-care decisions. Texas Estates Code § 752.051 expressly makes the distinction between a financial and medical POA. 

A Durable Power of Attorney Protects You During Incapacity

A durable power of attorney allows an adult, known as the principal, to authorize another person to act as an agent in financial and property matters. What makes the document “durable” is that the authority can continue even if the principal later becomes disabled or incapacitated. Under Texas Estates Code § 751.0021, the document must contain language providing that the authority is not affected by later incapacity or becomes effective upon incapacity. It must also satisfy Texas execution and acknowledgment requirements.

That the power of attorney is durable is critically important for estate planning in Texas. Why does it matter? The reason is that an ordinary authorization that ends when a person loses capacity may become useless precisely when help is needed most. A properly drafted durable power of attorney allows the designated agent to step in and handle authorized financial matters without requiring the principal to sign new documents after losing the ability to understand or execute them.

You Can Decide When Your Agent’s Authority Begins

Texas gives the principal flexibility over when the agent may begin acting. The statutory form allows a person to make the power effective immediately or to make it effective only upon disability or incapacity. It is sometimes called a “springing” power of attorney because the agent's authority springs into effect after the specified condition occurs.

Unless the durable power of attorney document defines incapacity differently, Texas Law generally treats the principal as incapacitated when a physician certifies in writing, following a medical examination, that the principal is mentally incapable of managing his or her financial affairs. Still, the specific circumstances always matter. 

The Document Can Give an Agent Broad or Carefully Limited Powers

A durable power of attorney does not have to be an unrestricted grant of financial authority. Texas law permits a principal to determine which powers an agent receives. The statutory form identifies categories involving matters such as real property, banking, business operations, insurance, estates and trusts, claims and litigation, personal and family maintenance, taxes, and other financial transactions. Texas Estates Code Chapter 752 explains the scope of these statutory powers.

It is important to emphasize that some particularly consequential acts require more specific authorization. Under Texas Estates Code § 751.031, an agent generally cannot create, amend, revoke, or terminate an inter vivos trust, make gifts, create or change survivorship rights, or create or change beneficiary designations merely because the document contains a broad general grant of authority. Those powers must be expressly granted. If you have any questions about these issues, an experienced Houston estate planning attorney can help.

Choosing the Right Agent is Just as Important as Signing the Durable POA Document

A durable power of attorney can confer substantial authority over bank accounts, property, investments, and other assets. The principal should select an agent who is trustworthy, financially responsible, organized, and willing to act in the principal's interests. Texas law imposes legal obligations on an agent who accepts the appointment and acts under the power of attorney. The law treats the acting agent as a fiduciary and imposes duties to inform and account for actions taken on the principal's behalf. Still, the best thing that you can do is to be sure that you select a competent agent, whether a family member, friend, or professional.

A Durable Power of Attorney Can Help Your Family Avoid a Crisis

The strongest reason to execute a durable power of attorney is that incapacity often occurs without warning. A serious accident, stroke, illness, cognitive decline, or other event can suddenly leave an adult unable to manage accounts, pay bills, handle property, deal with insurers, or conduct other financial affairs. Without advance authorization, family members do not automatically receive unlimited legal authority to manage another competent adult's property merely because they are a spouse, child, or close relative. In some circumstances, a court-supervised guardianship may become necessary to obtain authority over an incapacitated person's estate.

We are Leaders in Estate Planning in Texas

Estate planning is complicated, especially when it comes to issues of preparing your finances. A durable power of attorney can help you ensure that you have empowered a trusted person to protect your best interests no matter what tomorrow brings. At SimpleLawTX, we have the professional expertise that you can trust when it matters most. If you have any questions about setting up a durable power of attorney, we are here to help. Contact us today to set up a strictly confidential, no-obligation initial case consultation. With a main office in Houston, we handle estate planning issues throughout Texas.