Durable Power of Attorney in Texas
If you were to become unable to make financial decisions, either permanently or for a temporary period of time, who would make those decisions for you? How would your bills get paid? Who would manage your finances?
The Texas legislature has anticipated such things happening and has provided a form to be used for appointing an agent to handle those affairs for you. It’s called a durable power of attorney, a printable copy of which is attached to this article. Although you can complete the form yourself, it is preferable to have it prepared by your business lawyer to ensure it is properly completed and executed.
The durable power of attorney allows you, the principal, to designate another person as your agent to make those decisions for you in the event you become disabled or incapacitated. You may also name a secondary agent who is authorized to make those decisions for you in the event your primary agent is unable or unwilling to do so.
Choosing When Power of Attorney Become Effective
The power of attorney requires your signature before a notary public or someone else who is lawfully authorized to administer oaths. It also must contain the words “This power of attorney is not affected by subsequent disability or incapacity of the principal” or “This power of attorney becomes effective on the disability or incapacity of the principal”. You have the choice to have the power of attorney become effective immediately upon signing or to have it become effective at some later time when you become disabled. It is effective indefinitely unless you state a given limitation of time.
Divorce from Agent
If, after signing a power of attorney you become divorced from the person you appointed as your agent or you have your marriage annulled, any powers granted to the former spouse are terminated unless otherwise expressly provided by the power of attorney. However, the powers will continue in effect if a person acts in good faith under or in reliance on the power.
Using Durable Power of Attorney in Texas
When a durable power of attorney is used, a third party who relies in good faith on the acts of the agent within the scope of the power of attorney is not liable to you. For example, if you authorize your agent to withdraw funds from a bank account and the agent does so, even if you did not want him to withdraw the entire account, the bank is not liable to you for the loss of funds.
Revoking Power of Attorney
You may revoke a power of attorney at any time. However, if a third party relies on the power of attorney, the revocation is not effect as to him until he gets actual notice that you revoked the power.
A durable power of attorney used in a real property transaction that includes recorded documents must also be recorded. For example, if your agent sells your home, the power of attorney must be recorded along with the deed.
Broad Powers of Attorney
You can give very broad or very narrow powers to you agent. It is usually a good idea to confer broad powers, because, after all, the purpose of the power of attorney is to allow someone else to handle your affairs if you are unable to do so.
Powers and Duties
The power of attorney confers certain powers on the agent but it also confers duties. The agent is a fiduciary and has a duty to inform and to account for actions he takes. He must maintain records of each action taken or decision made with respect to your property. You may demand an accounting of all assets and liabilities, a list of all actions taken, a list of all property over which the agent has exercised control, and all documents and records related to the property. If the agent refuses to provide for a proper accounting, you can sue against the agent to compel him to do so.
Choosing Your Agent
So, who should you appoint as your agent under a power of attorney? Choose someone you completely trust, someone who is honest and makes good decisions. Make sure that person agrees to act as your agent. Review your choice from time to time and if circumstances show that the agent you appointed is no longer your best choice, destroy the power of attorney document and have your business lawyer prepare a new one, naming someone else as agent.