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What is a Texas Power of Attorney?

 

A Texas power of attorney is a legal form that acts as the authorization for an individual, known as the agent or attorney-in-fact, to make financial decisions, healthcare decisions, real estate decisions, or estate decisions on behalf of the person granting this authority. A Texas POA is often used for estate planning. However, there are other instances where a POA is a useful tool.

 

Quick Reference:

 

The person granting permission is referred to as the principal, donor, or grantor.

 

The person receiving authorization is known as the agent or the attorney-in-fact.

 

TX POA Laws:

A Texas power of attorney is a power of attorney form that is in compliance with the requirements of Texas statutes and is, therefore, legally enforceable. According to the statutes in the State of Texas, power of attorney forms must comply with Texas Estates Code § 751 which states that:

 

  • A power of attorney must be signed in the presence of a notary public
  • The principal must be at least 18 years of age
  • The principal must be considered of sound mind and understand what they are signing and what it means
  • If the agent has the right to conduct real estate transactions, the power of attorney must be placed on file with the county clerk in the county where the real estate is located

 

While an agent does receive the legal right to make decisions on behalf of the principal, it does not grant the agent the legal ability to direct the principal. Additionally, the POA may end if:

 

  • The principal provides a date within the document that causes the POA to expire
  • The principal becomes incapaciated and the POA is not durable
  • The principal revokes the POA
  • A guardian is appointed for the principal
  • The principal dies

 

Why Would You Use a Texas Power of Attorney Form?

 

There are several reasons why someone would use a Texas power of attorney form to give someone the authorization to make decisions related to their tangible personal property transactions, financial institution transactions, tax matters, or their well-being. Some of those reasons include:

 

  • Age, mental health reasons, and illnesses. They may want their affairs handled in specific ways. It is generally advised that everyone from those who are terminally ill to those who are perfectly healthy establish the right powers of attorney to have their matters appropriately handled and their wishes fulfilled.
  • A person with a mental illness may require a different type of power of attorney than someone with a terminal illness.
  • A person with dependent children may have the need for a different power of attorney than a single person with no dependent children.

 

Each person’s power of attorney needs vary. Thankfully, there are several types of power of attorney documents. Before you decide to get a power of attorney, you should seek legal advice. Ask about the best POA to suit your needs and how to revoke a power of attorney if it becomes necessary. Here are a few of the most common.

Durable Power of Attorney

A durable power of attorney is a power of attorney that stays in effect even if you're no longer incapacitated.

  • The State of Texas provides a statutory durable power of attorney form. This legal document may be used by the attorney-in-fact to buy or sell real property or even manage the financial affairs on behalf of the principal regardless of any subsequent disability.

Medical Power of Attorney

A medical power of attorney form allows another person to make health care decisions on behalf of the principal.

  • According to the Texas Medical Association, this POA goes into effect immediately after it is signed by the principal and the agent. It remains in effect until it is revoked or until the principal becomes competent. Some medical power of attorney documents include an expiration date.

General Power of Attorney

A general power of attorney enables a family member or other person to make financial decisions on behalf of the principal.

  • If the principal becomes incapacitated,  this financial power of attorney becomes invalid. You should go to a law firm to get legal advice before deciding you want to use this POA for any period of time since it gives someone the ability to engage in financial transactions on your behalf.  

Limited Power of Attorney

A limited power of attorney is also known as a special power of attorney.

  • It allows an attorney-in-fact to only make certain decisions on behalf of the principal in good faith. For example, they may be able to make decisions related to medical treatment or other medical decisions, but not financial matters. According to TexasLawHelp.org, this POA may also be given for a limited amount of time.

Tax Power of Attorney

In the State of Texas, a Tax Power of Attorney is known as Form 86-113. Completing this form allows a qualified individual, such as an accountant, to prepare and submit state and federal taxes on behalf of the principal who completed the form.

  • This form is limited, and no other financial decisions may be made by this individual.  

Vehicle Power of Attorney

A Vehicle Power of Attorney is known as Form VTR-271. The agent is able to buy, sell, and otherwise handle the necessary documentation required by the Texas Department of Motor Vehicles.

  • A Vehicle Power of Attorney is commonly used in planning Texas estates.

Real Estate Power of Attorney

A real estate power of attorney gives the agent the ability to buy, sell, and manage the property for the principal.

Guardian of Minor Power of Attorney

A guardian of minor power of attorney specifically applies to guardians of minors.

  • It can be used for estate planning or to provide temporary decision making authority on behalf of the minor. It could be used to give another adult the ability to make healthcare decisions for the child if the parent is not with the child.

Springing Power of Attorney

According to TexasLawHelp.org, a springing power of attorney becomes active only if something specific occurs.

  • Generally, the principal must become either disabled or incapacitated. Because this type of power of attorney is in effect if the principal is disabled or incapacitated, it is also considered a durable power of attorney.

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