General Power of Attorney

A general power of attorney is a document you sign that names someone to act on your behalf for business, legal or financial matters. You will be called the “principal” and the person you name is called your “agent” or “attorney in fact.” It would be prudent to take steps to help ensure third parties will accept your power of attorney by having a lawyer draft and tailor it to specifically address the activity you want conducted on your behalf. When you are incapacitated is not the time to find out there is something wrong with your power of attorney.

Free Online Power of Attorney Forms

You should be wary of using a power of attorney you find on the internet because it may not meet the legal requirements of Texas or may not contain the details that are appropriate for your situation. Third parties could find it too ambiguous to accept. Without a clear power of attorney, a court may need to appoint a guardian. That means you will not only have unexpected expenses, but you will have no control over who is appointed.

When Do You Need a Power of Attorney?

Examples of when a power of attorney may be appropriate include when you need someone to:

  • Handle your affairs while you travel for work.
  • Pay your bills if you are hospitalized.
  • File your tax returns.
  • Register your car.
  • Handle matters regarding your Medicare, Medicaid, or social security benefits.
  • Conduct business with your landlord or mortgage company.

There are several types of powers of attorney. The most common are:

General Power of Attorney

As its name implies, a general power of attorney is used to give your agent broad authority to act as if they were you. If you become mentally or physically incapacitated, then the general power of attorney is no longer  valid. It would be unfortunate for your agent to not have the authority to act on your behalf at the time you may need them the most. “Incapacitated” is defined in Texas Estates Code §1002.017, as an adult who is substantially unable to care for his or her own physical health, or manage their own financial affairs or provide food, clothing or shelter for him- or herself because of a physical or mental condition.

Special Power of Attorney

A special power of attorney specifically lists the activity you want your agent to perform. For example, it may say, “register my 2015 BMW 325, VIN # 123456789 in my name in Bexar County Texas,” or “make deposits, transfers, or withdrawals to or from my checking account (#123456789) at Randolph Brooks Federal Credit Union.”  

Some people have been victims of poorly drafted special powers of attorney. For example, a young soldier gave a power of attorney to his girlfriend to register his truck while he was deployed; however, the Department of Motor Vehicles allowed the soldier’s girlfriend (now ex-girlfriend) to register his truck in her name. He had a difficult time locating his truck and his girlfriend when he returned from deployment. A special power of attorney drafted by an experienced lawyer can help you avoid that mistake.

Durable vs. Springing Power of Attorney

Under Texas Estates Code §751.0021, in order for a power of attorney to be valid when you become incapacitated, it must be either “durable” or “springing.” Durable means that the power of attorney includes a statement that it is not affected by your incapacity. Springing means it becomes effective on your incapacity. In either case, your power of attorney must be signed before a notary public and dated.

Durable Power of Attorney

To allow your agent to act on your behalf before you are incapacitated and while you are incapacitated, you can make the power of attorney “durable.” Although the agent is required to act in your best interest, you should be careful with who you name as your agent because they will be you in a legal sense.  

It should go without saying that you should only give a general power of attorney to someone you truly trust (and can find). For added protection, you could store your power of attorney in a secure place and notify your future agent where they can find it if you become incapacitated. If you believe a general power of attorney is too much power to give away, you can limit it with a special power of attorney or a springing power of attorney. Don’t fret if you give a power of attorney to your spouse and subsequently divorce. Under Texas Estates Code §751.132, divorce terminates the spouse/agent’s authority.

Springing Power of Attorney

A springing power of attorney gives the agent the authority if, and only if, you become incapacitated. Because it is not terminated by your incapacitation, a springing power of attorney is considered a durable power of attorney. You can think of a springing power of attorney as a document that sits idly by, waiting to “spring” into action upon your incapacitation.

When Do Different Powers of Attorney Take Effect?

Here is a chart to demonstrate when each power of attorney is effective.

EFFECTIVE:

Before You Are Incapacitated

After You Are Incapacitated

Durable POA

YES

YES

General POA

YES

NO

Springing POA

NO

YES

When you give an agent a power of attorney, you should feel comfortable knowing that Texas Estates Code §751.201 requires third parties to accept a durable power of attorney unless there are statutory grounds to refuse. If a third party refuses to accept the power of attorney, they are required to provide a written statement to your agent advising the agent of the reason. Texas Estates Code §751.206, sets forth 11 reasons a third party can refuse to accept a power of attorney. Some include:

  • The agent is exceeding their authority.
  • Elder financial abuse is suspected.
  • The principal or agent is suspected of criminal activity.
  • There is more than one agent and the third party is receiving conflicting directions.
  • The third party has actual knowledge that the power of attorney is no longer valid.

It should be obvious that powers of attorney can serve as a very important tool in your estate planning, but care should be taken in the drafting to help ensure a power of attorney meets your needs and will be accepted by third parties.

Power of Attorney Preparation: Online and In-Home Texas Estate Planning Services

Contact the Law Office of Hugh Spires, Jr. if you need assistance with preparing powers of attorney. Our estate planning attorney travels within 50 miles of San Antonio, Texas or provides your documents through a secure web portal.

About Hugh

Hugh Spires, Jr.'s Profile Image
Hugh has been practicing law since 1995. He served 20 years in the Air Force JAG Corps as an attorney, where he provided estate planning for military members, retirees and their dependents. He understands the inconvenience and burden of traveling to an attorney’s office, yet he appreciates the importance of obtaining legal services when you need it.

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