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What is a Power of Attorney (POA)?

Power of Attorney is a legal document that gives an individual the authority to perform certain actions in another's stead. The authorized person is called the "agent" or "attorney-in-fact," while the party on whose behalf the agent acts is called the "principal".

In Texas, a power of attorney often becomes effective when the principal is physically or mentally unable to undertake specific actions for themselves. For example, military personnel often need another to handle their affairs while away on official assignments. The document can permit the agent to perform a limited or wide range of actions, such as:

  • Business administration
  • Estate management
  • Healthcare decisions
  • Personal matters
  • Financial transactions

Depending on the terms, a power of attorney can last for a short or extended period, even as long as a principal's lifetime. The scope of their authority also depends on whether they are a Texas General Power of Attorney or they are Limited to a specific issue.

What Types of Power of Attorney are Available in Texas?

The different types of power of attorney in Texas include:

Powers of attorney provide varying degrees of protection to a principal. For example, a springing power of attorney only takes effect when a specific event (such as the principal's disability) occurs. On the other hand, a general power of attorney may end when the principal becomes incapacitated.

Below is a brief breakdown of the types of power of attorney available in Texas:

  • General Power of Attorney: This POA is broad in scope and allows an agent to carry out a broad range of actions on behalf of a principal.
  • Limited Power of Attorney: This restricts an agent’s ability to act for the principal to a few functions
  • Texas Durable Power of Attorney: This is a general POA and continues after a principal's incapacitation.
  • Springing Power of Attorney: This springs into effect if and only when the principal suffers a disability or becomes incapacitated.
  • Texas Medical Power of Attorney: This authorizes an agent to make healthcare decisions for a principal when the individual is no longer able to do so.

Is Power of Attorney Public Record in Texas?

No. Generally, a Texas power of attorney is considered a private contract, making it inaccessible for public inspection. However, this general rule is subject to exceptions, including when the document is:

  • Recorded in the Land Records Division (or County Clerk's office) of the county where a principal owns real estate. This filing is mandatory when the agents' powers include handling real estate transactions.
  • Filed in court as part of a legal proceeding

In the above cases, the power of attorney will be considered public information in accordance with the Texas Public Information Act.

How to Get Power of Attorney in Texas

Creating a power of attorney is no trivial matter. As such, would-be principals are advised to follow applicable legal requirements and exercise caution when selecting an agent.

Individuals are only qualified to establish or become agents of a power of attorney in Texas when:

  • They are at least 18 years old.
  • They are of sound mind (i.e., they understand the scope and implications of the POA)

Per Texas law, a person cannot force or compel another to sign a power of attorney as an agent, as the latter's acceptance is integral to a valid agreement. Also, the power of attorney must be in writing. It may be wise to seek the help of an experienced legal practitioner when preparing a power of attorney to ensure compliance with all legal requirements. However, these are the usual steps for getting a power of attorney in Texas:

Step 1. Select the Agent Who Will Be Named in the Pofa

Anybody can become an agent in a power of attorney in Texas so long as they are 18 years or older and of sound mind. However, due to the elaborateness of an agent's responsibilities, principals should make trustworthiness an essential criterion when selecting an agent.

Not only should the agent be trusted to act in the principal's best interests, they should also have excellent decision-making skills, be assertive, and live close to relevant institutions. For example, for a medical POA, principals should choose agents that can live within a reasonable distance and can be readily available.

Step 2. Create the POA

The next step after selecting an agent is to draft the power of attorney document. Parties can download, print, and fill out statutory forms drafted by the Texas legislature. For example the Statutory Durable Power of Attorney (also indexed in Section 752.051 of the Texas Estates Code) or Medical Power of Attorney (MPOA) form.

Alternatively, they can opt for online templates to create a power of attorney. A third (and the safest) option would be to let a lawyer draft the POA document to ensure it adheres to the related laws.

Regardless of the mode of drafting, a valid POA should include some basic elements. These include:

  • The principal and agent's names and addresses
  • A detailed description of the agent's powers, including handling tax matters, real and personal property transactions, healthcare decisions, business operations, and stock and bond transactions.
  • Restrictions on the agent's powers
  • Special instructions for the agent
  • Effective date and length of the power of attorney
  • The parties' signatures and date

Powers of attorney drafted in Texas are not automatically durable. Those who intend to draft a durable POA must state it explicitly in the document.

Step 3. Sign the POA in a Notary Public's Presence

Per Texas Law, a principal must notarize the POA (i.e., sign it in the presence of a notary public). If it is a medical POA, the party can opt to sign it in the presence of two witnesses, as long as one of the witnesses is a disinterested party (Section 166.154 of Texas Health and Safety Code).

Generally, notarization and witness signatures help to confirm the principal's identity and verify that the parties named in the document signed it willingly. This adds credibility to the document.

Step 4. Safely Store the Original POA

It is recommended that individuals make copies of the POA and store the original in a safe place after signing the document. Apart from protecting the document from damage, it also ensures that loved ones have access to it. A "safe place" can be anywhere with adequate security measures and free from adverse environmental conditions. This includes:

  • A home office's filing cabinet
  • A fire/waterproof safe
  • A bank safety deposit box

The POA should not be locked away in an inaccessible place and authorized persons should always be informed of the document's location. Also, principals should have the duplicate copies stored in a different place from the original or create a digital copy, which will come in handy if the original copy gets damaged or lost.

Step 5. Give the Agent a Copy

It is best practice for a principal to give a copy of the duly signed or notarized POA to all interested parties, especially the agent. This allows the agent to familiarize themselves with the contents of the document, and it ensures they can easily present it as proof of their authority to act on the principal's behalf, when necessary.

Step 6. Forward a Copy to Other Relevant Parties

In Texas, powers of attorney that give the agents the power to handle real estate transactions must be filed with the County Clerk's Land Records Office in the county where the relevant property is located. This notifies the County Clerk of the agent's authority to sell, transfer, or mortgage the principal's real estate.

On the other hand, if a power of attorney authorizes the agents to conduct financial transactions, a copy of the document should be sent to the principal's bank and other relevant financial institutions. In the case of medical POAs, the principal's healthcare providers should receive a copy of the document.

Step 7. Review Regularly

Powers of attorney should be reviewed regularly (some recommend every 3 to 5 years). This ensures the document reflects any change in a principal's circumstances.

What Are the Signing Requirements for a Power of Attorney in Texas?

Texas law mandates that a principal's signature be acknowledged for a power of attorney to be legally sufficient. In addition, it should be signed in the presence of a notary public, or when the document is a medical POA, two witnesses, at least one of whom is a disinterested party.

A disinterested party is someone who is not a beneficiary or has no financial interest in any portion of the principal's estate and who is not the principal's family member, agent, or creditor.

The notary public is also mandated to sign the POA and affix a seal to the document, if any.

How Much Does it Cost to Get a Power of Attorney in Texas?

Generally, the cost of establishing a power of attorney in Texas ranges from $200 to $500, depending on factors like a document's complexity and length. However, parties can significantly cut costs by handling everything without a legal professional.

Is it Necessary to Hire a Lawyer to Draft a POA in Texas?

No, there is no law mandating would-be principals to procure the services of a lawyer to draft a POA in Texas. However, there are benefits to having an experienced lawyer either draft or review the document.

First, attorneys understand state laws and can leverage their knowledge to ensure the document is legally valid. Furthermore, lawyers can draft documents with more precision and clarity than non-lawyers would, ensuring that the principal's specific wishes are sufficiently and unambiguously reflected in the POA. This reduces the likelihood of conflict and gives the parties peace of mind.

Can I Revoke a Power of Attorney in Texas?

Yes. Principals can revoke a POA in Texas at any time and without anyone's permission so long as they are mentally competent. To revoke a power of attorney, principals should follow the steps below:

  • Draft a Power of Attorney revocation document (content should include the specific powers revoked, the agent's name, and the date of the initial POA).
  • Sign and notarize the document.
  • Notify the agent and other related parties of the revocation (these include banks and other financial institutions, healthcare providers, etc.).
  • Record the revocation in all the places the power of attorney was filed, such as at the County Clerk's office when the agent was granted power to handle real estate transactions.
  • Destroy original copies of the power of attorney to avoid confusion.

Other ways a power of attorney can end in Texas include:

  • Death
  • The agent is unavailable, and no alternate agent was named in the power of attorney
  • Court declaration of invalidity
  • Divorce (when the principal divorces a spouse who was the agent)

How Long Does a Power of Attorney Last in Texas?

A power of attorney in Texas generally lasts until:

  • The principal dies
  • The principal revokes it
  • The stated time frame for handling the specific matters in the document expires
  • The principal becomes incapacitated (where the POA is nondurable)
  • The principal terminates the agent's authority and does not name a replacement

Can I Appoint Multiple Agents under Power of Attorney in Texas?

Yes, principals can appoint multiple agents under a power of attorney in Texas. However, principals should understand the implications of having more than one agent before agreeing to it. This informs their decision on whether to have the agents act independently or jointly.

While joint agents must agree on every decision, independent agents can act separately on the principal's behalf. Furthermore, principals can appoint a successor agent to step in and make decisions when the primary agent cannot fulfill their duties for any reason. Still, principals may choose only one agent to reduce the risk of conflict.

What Happens If I Do Not Have a Power of Attorney and Become Incapacitated in Texas?

Families are often thrown into confusion when a loved one without a power of attorney becomes incapacitated. In such cases, the family can approach the court to appoint a guardian ("conservator") to handle the incapacitated person's estate. The process is often expensive and time-consuming and requires hearings and examinations by medical personnel.

To avoid this, individuals should create valid powers of attorney and name a trusted agent to handle their affairs if they become incapacitated. Principals may also consult with a lawyer to ensure they have a comprehensive plan for their estate.

Does a Texas Power of Attorney Need to be Notarized?

Yes. Texas law mandates that a power of attorney be signed before a notary public, who will confirm the principal's identity, append their signature, and affix their seal. However, in the case of medical POAs, the notarization requirement can be waived. In such instances, the principal can sign the document before two competent witnesses, who will also append their signatures.

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