15 Feb
While a power of attorney (POA) in Texas is a helpful legal tool, it’s regularly misunderstood. There are many misconceptions about POA, including that it always lasts after death and covers all situations.
The more you understand about power of attorney in Texas, the more confidence you can have using this legal tool in your family. Keep reading to understand what it covers, what it doesn’t, when you should update it, and more.
What is a Power of Attorney (POA) in Texas?
Under the Texas Estates Code, power of attorney is a written document that authorizes someone, an ‘agent,’ to make decisions or take specific actions on behalf of someone else, the ‘principal.’
In Texas, several powers of attorney exist to achieve different things:
- General power of attorney: A document that grants the agent a broad range of rights to act on behalf of the principal, but expires when the principal becomes incapacitated.
- Limited power of attorney: A document that grants an agent the right to perform very specific actions.
- Durable power of attorney: A document that takes effect upon or lasts after the principal becomes incapacitated. It differs from a general power of attorney, which terminates upon the principal’s incapacitation.
- Medical power of attorney: A document that gives someone else the right to make decisions about the principal’s medical care on their behalf. It continues beyond the time when the principal becomes incapacitated.
Of all POA types, durable power of attorney is the most common, often because it remains valid once the principal is incapacitated.
What Does Power of Attorney Cover?
What power of attorney covers depends on the type you’ve requested through your wills, trusts, and estate planning lawyer. A properly drafted Texas POA can typically authorize the following:
- Financial and banking transactions, including managing bank accounts, paying bills, handling investments, and accessing safe deposit boxes
- Estate and asset planning (if granted)
- Real estate transactions, such as buying and selling property, refinancing mortgages, and managing rental properties
- Business operations, such as payroll and taxes management, contract signing, and running companies
- Tax matters, including working with the IRS and filing state and federal taxes
- Government matters, including Medicare, Medicaid applications, and Social Security.
What Doesn’t Power of Attorney Cover?
While a durable power of attorney provides an agent with a broad range of permissions, there are certain things it doesn’t cover. A POA in Texas won’t:
- Override your will
- Let your agent vote for you
- Allow your agent to make medical decisions for you
- Remain valid after your death
- Automatically provide guardianship of children
How Long Does a Power of Attorney Last in Texas?
The length of time a power of attorney lasts in Texas depends on the type you’ve drafted with your lawyer.
- Durable power of attorney: Lasts until your death or revocation, even if you become incapacitated.
- Limited power of attorney: Expires when a specific task is completed or a date is reached.
- Springing power of attorney: Becomes effective upon a specific event and lasts until death or revocation.
A POA will also end if an agent dies, resigns, becomes incapacitated, or if a court invalidates it.
When Should You Update Your Power of Attorney?
There are many situations in which it’s important to call your attorney and update your power of attorney:
- You wish to change the agent because they’ve relocated, have become ill, have died, or you have lost trust in them.
- You’re newly married and want your spouse to be your POA agent, or you’re divorced and want to remove them.
- You’ve experienced a major life change, such as starting a new business, receiving an inheritance, forming a blended family, or experiencing asset growth.
- There has been a law change. For example, Texas updated its durable power of attorney laws in 2017, which means your POA may need to be revised to comply with current standards.
- It has been 3-5 years since you last updated it, and you’re worried about financial institutions honoring your old POA.
How to Get Power of Attorney in Texas
If you’re concerned about losing the ability to make decisions about your personal care, property, or finances due to illness, injury, or age, appointing a trusted person through a power of attorney is crucial. Fortunately, with an experienced lawyer by your side, it’s a straightforward process:
1. Select the best type of POA for your preferences and goals. Most people opt for a durable POA to manage their financial affairs or a medical POA to make healthcare decisions.
2. Choose a trusted person as your agent, such as a spouse, child, or friend, who will act on your behalf. You should also consider naming a successor agent.
3. Fill out the necessary forms with an experienced lawyer. During this process, specify the powers you want to grant and whether the POA is immediate or springing. This means that it comes into effect immediately or activates upon your incapacity. This is also your opportunity to specify any limitations of the POA.
4. Notarize the document, which means that you, the principal, will sign it, and an authorized notary public will stamp it to verify your identity, willingness, and understanding.
5. Where required, distribute copies of your POA to your agent, bank, and healthcare provider.
Plan Your Power of Attorney (POA) with Livens & Reed
If you’re ready to experience the peace of mind that comes with having a power of attorney, request more information from Livens & Reed, PLLC. We can advise you of your options and help you establish the right POA for your unique needs and situation. Contact us today to schedule a consultation.
