A power of attorney in Texas is a legal document that provides someone with the authority to act on behalf of someone else. The person who is given that authority to act is called the agent or attorney-in-fact.
The person on behalf of whom the agent is allowed to act is called the principal. It is important to be aware that the agent or attorney-in-fact does not have to be an actual attorney.
To find out more about powers of attorney in Texas and how they can be beneficial, it is important to schedule a lawyer consultation.
What Are the Requirements for a Power of Attorney in Texas?
Powers of attorney have to be recorded in writing. The agent who is granted rights can exercise all of the rights and powers that are provided to them according to the power of attorney. It is important to note, however, that the agent is not permitted to act outside of the scope of the authorization that was provided to them.
Typically, the power of attorney must be signed and dated by the principal. The principal must have the requisite mental capacity to enter into a power of attorney.
There may also be other requirements for a valid power of attorney, such as the principal signing the power of attorney document in front of a notary public and the agent signing and dating the document in front of a notary public.
A Texas lawyer can help with power of attorney drafting to make sure that their client’s documents are valid and enforceable under Texas law.
What Types of Powers of Attorneys Exist?
There are different types of powers of attorney that someone can use, depending on their specific needs. Someone can create a financial power of attorney, a medical power of attorney, or a general power of attorney.
A financial power of attorney allows an agent to make financial decisions on behalf of the principal. This can be a general power or can be limited to certain transactions.
A medical power of attorney allows the agent to make decisions about the principal’s medical treatments, end-of-life care, and other issues. Similar to the financial power of attorney, this can be general or limited in scope.
A power of attorney with gifting clause gives the agent the right to make gifts on the principal’s behalf. There are also durable powers of attorney and non-durable powers of attorney. The durable power of attorney lasts beyond the incapacity of the grantor.
The durable POA is limited in time, as it does not go beyond the death of the principal. In contrast, a non-durable power of attorney is revoked by operation of law when the principal becomes incapacitated or passes away.
What Types of Decisions May a Power of Attorney Be Used For?
Powers of attorney can be used for general and specific purposes, as noted above. A general power of attorney gives the agent rights that are comprehensive in scope.
This means that the agent will typically have all of the rights and powers that the principal has, such as:
- Signing documents
- Paying bills
- Making all of the decisions related to the principal’s real and personal property
General powers of attorney can be used whether or not the principal is incapacitated. They terminate when the grantor becomes incapacitated, passes away, or if they revoke the document.
A power of attorney can also be used to authorize an agent to make decisions of specific issues, such as a certain transaction. These are called limited powers of attorney. They allow an agent to act for one single or specific transaction or issue.
When Does a Power of Attorney Go Into Effect in Texas?
An individual may be wondering, “when does power of attorney kick in?” Typically, a Texas power of attorney will go into effect when someone becomes incapacitated.
Powers of attorney, however, can go into effect based on other events or situations, such as:
- A specific date provided in the power of attorney documents
- When someone is outside the country and cannot appear to sign a document
- Based on verbal instructions
- When someone has become unable to make their own legal decisions
Each type of power of attorney may have its own terms about how and when it will go into effect. Because of these variances, it is important to consult with a Texas lawyer for more information on when different powers of attorney go into effect.
What Are Two Common Scenarios Where Powers of Attorneys Are Used?
One common scenario when a power of attorney is used is for a health care proxy. Health care proxies are used when principals appoint agents to make decisions about their health care on their behalf.
A health care proxy does not go into effect until the grantor has become incapacitated. To be valid, a health care proxy typically has to be drafted and signed by the grantor.
In Texas, a health care proxy must be signed by two witnesses who are not the named agent or other person who may benefit from the grantor’s death. The document also has to be notarized.
Another common scenario when a power of attorney is used is for estate planning purposes. A power of attorney gives an agent the right to manage assets that can become part of the grantor’s estate when they die. For example, if a grantor has a 401(k) account, the agent, if allowed by the power of attorney document, can make investment decisions affecting the 401(k) until the grantor passes away.
What Are Power of Attorney Scams?
Power of attorney scams arise when one individual deceives another into letting them act as their representative. It is common for these types of scams to be perpetrated on older people.
Sometimes, however, they also happen between relatives and family members. One helpful way to prevent this type of issue is to include clear instructions about when the power of attorney goes into effect.
This scam is often successful because the grantor is not clear about how and when the agent relationship goes into effect. This can allow the agent to engage in conduct that was not intended by the grantor.
Do I Need a Texas Lawyer for Help With Power of Attorney Arrangements?
If you are considering creating a Texas power of attorney or have questions or concerns about your existing power of attorney, it is essential to reach out to a Texas estate lawyer. If the power of attorney is not clearly drafted, confusion, fraud, and disputes can result.
Your Texas estate attorney can ensure that your power of attorney is valid, enforceable, and clearly written. If a dispute does arise involving your power of attorney, your lawyer will guide you through the legal resolution process.
In as little as 15 minutes, you can use LegalMatch’s free attorney matching services to find an estate lawyer in your area of Texas who is ready to help you create your power of attorney or revise an existing one. This will ensure your rights and property are protected and the person you name as your agent knows exactly what they can and cannot do and when.
