Table of Contents
- Download a Texas Power of Attorney Template
- Texas Power of Attorney Requirements
- Why Draft a Texas Power of Attorney?
- Are Medical Powers Authorized by a Texas POA?
- Expenses and Compensation
- Broadening and Limiting Powers
1. Download a Texas Power of Attorney Template
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2. Texas Power of Attorney Requirements
Any adult with assets or property in Texas can benefit from a power of attorney, which is a document that gives a person the legal authority to handle another’s business and financial transactions and other specifically noted duties.
A power of attorney is an agreement in which a “principal” asks a designated “agent” or “attorney in fact” to handle daily duties on his/her behalf. The document, which must adhere to the Chapter 752 of the Texas Estate Code, empowers an agent to act as representative when a principal is unavailable or no longer capable of signing or attending to certain responsibilities. Depending on the specifics of the document, a power of attorney grants an agent the power to handle a principal’s banking, real estate, and other types of transactions.
To be valid, a power of attorney has the following requirements:
- The document must be in writing and list the:
- Name and signature of the principal
- Name of the agent
- Date of the agreement
- Powers granted
- When the powers begin and end
- A notary must sign and date the document
- Attorneys in fact must identify themselves in writing by providing their signatures, their titles, and the principal’s name. For example, an agent signing for a principal’s bank transaction would write: “(Principal’s Name) by (Signature of Attorney in Fact/Agent) as Attorney in Fact/Agent.”
- If the power of attorney is used for real estate transactions, such as sales or transfers of properties, it must be recorded with the Texas of Real Property Records in the county where the property is located. In general, it’s not necessary to record the POA.
Power of Attorney PDF Sample
The power of attorney (POA) sample below gives “Agent” Linda J Burns the authority to make financial decisions in the event that “Principal” Minnie G Simmons is incapacitated. Linda has the authority to handle issues dealing with Minnie’s property, stocks, insurance, and business.Texas Power of Attorney (Financial)
3. Why Draft a Texas Power of Attorney?
In an event of an emergency, having a power of attorney that details who can handle financial transactions can spare an individual’s family and loved ones from the stress of making those decisions. For example, if a person suffered serious injuries in a car accident and was left in a coma, a power of attorney grants the agent to handle whatever financial terms are outlined in the document.
In addition to sparing loved ones extra stress, it ensures the family is taken care of financially, such as handling insurance matters, paying bills, and overseeing retirement benefits.
Possible Powers Granted
For individuals’ convenience, Texas Health and Human Services provides a downloadable Statutory Durable Power of Attorney in English and Spanish.
Like many standard power of attorney forms, Texas’ forms list certain duties that a principal can ask an agent to handle, including the following transactions:
- Bond, commodity, stock, and options
- Insurance, annuity, and retirement
- Estate, trust, and those related to beneficiaries
- Banking and financial
- Real estate
- Tangible personal property
- Business operating
Texas’ form also specifically permits principals the options of granting agents the authority to handle any business related to personal and family maintenance, claims and litigation, and tax business, as well as digital assets and the content of an electronic communication. Also, agents can be authorized to handle principals’ benefits from civil or military services and governmental programs, such as Social Security, Medicare, or Medicaid.
Instructions to Follow
If using Texas’ form, a principal must initial each power he/she wants to give an agent or co-agents or write his/her initials in front of the “all of the powers listed” section of the document. Since the power of attorney is durable, the document remains effective until the principal dies or revokes it, the agent resigns, or a guardian is established on behalf of the principal’s estate.
Texas Form Updates
In 2014, Texas changed its form to include an “Important Information for Agent” section, which warns an agent that a fiduciary relationship is established once he/she accepts the powers under the agreement. As a member of the fiduciary relationship, the agent accepts personal responsibility and liability for his/her actions on behalf of the principal.
When a person agrees to be an agent, he/she promises to loyally act in good faith in a way that benefits the principal and avoid conflicts that would not have the principal’s best interest at heart.
4. Are Medical Powers Authorized by a Texas POA?
A durable or specific statutory power of attorney does not authorize an individual to make medical and other healthcare decisions on another’s behalf. To make decisions, such as to stop treatment or discontinue life support, individuals need to initiate a medical power of attorney. This document, which must adhere to Chapter 166 of Texas’ Health and Safety Code, gives an agent the authority to make any and all health care decisions in accordance with the principal’s wishes and religious and moral beliefs when the person is no longer capable of making those decisions.
Texas also provides a downloadable medical power of attorney form in English and Spanish. Also, a medical power of attorney must be notarized or have witness signatures.
Special Powers and Considerations
Though a power of attorney can be instructed to handle a host of financial and business decisions, some acts, such as compensation, must be specifically noted and clarified within the document.
5. Expenses and Compensation
Information about gifts and compensation to agents must be noted separately and intentionally within a power of attorney. On Texas’ form, this information is found under its “special instructions” section.
In this section, a principal must either agree to allow an agent to be reimbursed for reasonable expenses incurred while handling his/her duties, or allow an agent to be reimbursed for expenses plus reasonable compensation for his/her work. If a principal fails to select one option over the other, it is assumed that agent is entitled to both expenses and compensation.
If an agent is granted the power to use the principal’s property for gifting people, including the attorney in fact, a principal must initial this section of the form. Most importantly, if the principal permits gifts, the amount to an individual may not be higher than the yearly exclusions permitted under federal guidelines in any given calendar year. According to the Internal Revenue Service, the annual exclusion is $15,000.
6. Broadening and Limiting Powers
Texas’ durable power of attorney form also has a section in which a principal can further extend or restrict powers. If the principal selects that a subsequent disability or incapacity does not impact the document, then he/she is agreeing to have the document take effect immediately.
Unless otherwise specified, Texas’ durable power attorney does not end until the principal becomes incapacitated. Therefore, if this is what the principal wants, the document must specify the power of attorney “is not affected by subsequent disability or incapacity.”
If a principal chooses for a power of attorney to begin following disability but doesn’t clearly outline what constitutes incapacity, a person is considered disabled or incapacitated if a doctor examines the individual and certifies in writing that the person doesn’t have the mental capabilities of handling financial decisions.