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Planning for the future is essential. Part of that planning often involves ensuring your affairs are handled according to your wishes, even if you’re unable to make decisions yourself. The Durable Power of Attorney is a crucial tool for achieving this in Texas.
If you become incapacitated, this document allows you to appoint someone you trust to manage your finances and property. This guide provides a complete overview of setting up a Durable Power of Attorney in Texas.
Steps on How to Set Up a Durable Power of Attorney
Let’s break down the creation of a Texas Durable Power of Attorney into manageable, actionable steps. Getting this right is important, so take your time and understand each phase.
Step 1: Determine Your Needs and Wishes
Reflect on the specific powers you want to grant your agent. The scope of a Texas Durable Power of Attorney can be broad or limited. Do you want your agent to handle all financial matters? Or, do you want to restrict their authority to specific tasks, like paying bills or managing a particular piece of real estate?
Consider these common powers granted in a Texas Durable Power of Attorney:
- Real estate transactions (buying, selling, managing property)
- Banking and financial institution transactions
- Operating business interests
- Handling retirement accounts and investments
- Paying bills and managing debts
- Dealing with insurance policies
- Applying for government benefits
- Making gifts (subject to limitations and your specific instructions)
- Hiring legal representation on your behalf.
You must create detailed provisions matching your wishes when making your Durable Power of Attorney.
Step 2: Choose Your Agent (Attorney-in-Fact) Wisely
This is arguably the most critical step. Your agent will have significant power, so absolute trust is paramount. Texas law has some requirements for who can serve as an agent:
- The agent must be 18 years of age or older.
- The agent must be of sound mind.
Beyond these legal basics, consider these practical factors:
- Trustworthiness: Choose someone with unwavering integrity and honesty.
- Financial Responsibility: Your agent will be managing your finances. Select someone responsible for their own.
- Availability and Willingness: Ensure your chosen agent is willing and able to take on the responsibilities. Discuss it with them openly.
- Proximity: While not a strict requirement, having an agent who lives reasonably close can be helpful for practical matters.
- Understanding of Your Wishes: Your agent needs to understand and agree to carry out your wishes, even if they differ from their preferences.
You can also name a successor agent. The successor steps in if your primary agent becomes unable or unwilling to serve. This is a very useful precaution.
Step 3: Obtain the Correct Texas Durable Power of Attorney Form
While no single “official” Texas Durable Power of Attorney form is mandated by the state, the Texas Estates Code provides a statutory form. Using this statutory form, or a substantially similar form, offers certain legal protections and presumptions of validity. This statutory form is readily available online through government websites or legal resource providers.
However and very importantly, although a statutory form is available, consulting with an experienced estate planning attorney is strongly recommended. The statutory form is a good starting point, but a qualified attorney can:
- Tailor the document to your specific needs and circumstances.
- Ensure the document complies with all current Texas laws.
- Guide on complex issues, such as gifting provisions or specific asset management instructions.
- Help prevent future disputes or challenges to the document’s validity.
- Please advise if other estate planning documents are necessary.
Step 4: Complete the Durable Power of Attorney Form Carefully
Accuracy is paramount. Any errors or ambiguities in the Durable Power of Attorney document can create problems. Here’s what you need to do:
- Your Information: Provide your full legal name, address, and contact information.
- Agent Information: Include your agent’s (and successor agent’s, if applicable) full legal name, address, and contact information.
- Grant of Powers: Clearly and specifically state the powers you are granting to your agent. You can use the language provided in the statutory form or customize the language to reflect your precise wishes if working with an attorney. Be very specific. Vague language can lead to disputes.
- Effective Date: Decide when the Durable Power of Attorney will become effective. There are two primary options:
- Immediately Effective: The agent has authority when the document is properly signed and notarized.
- “Springing” Power: The power “springs” into effect upon the occurrence of a specific event, typically your incapacity. This requires defining the triggering event and the method for determining incapacity (e.g., certification by one or more physicians).
- Durability Clause: The document must explicitly state that it is a durable power of attorney, meaning it remains in effect even if you become incapacitated. This language is typically included in the statutory form.
- Specific instructions. The document should include how you would like your assets to be handled.
Step 5: Sign the Document Properly: Notarization is Required
Texas law requires that your signature on the Durable Power of Attorney be acknowledged before a notary public. This means you must sign the document in the notary’s presence, and the notary must verify your identity and witness your signature. The notary will then affix their official seal and signature to the document.
Note that your agent does not need to sign the Durable Power of Attorney.
Step 6: Provide Copies and Store the Original Safely
Once the Durable Power of Attorney is properly executed, make several copies.
- Give a copy to your agent (and successor agent).
- If your agent will be managing those accounts, provide copies to relevant financial institutions (banks, investment firms).
- Consider giving a copy to your physician, particularly if you have a springing power of attorney.
- Keep the original document in a safe and accessible location, such as a fireproof safe or a safe deposit box. Ensure your agent knows where to find the original.
Step 7: Review and Update Regularly
A Durable Power of Attorney is not a “set it and forget it” document. Your circumstances, wishes, and even Texas law, can change over time. Review your Durable Power of Attorney every few years, or more frequently if significant life events occur, such as:
- Marriage or divorce
- Birth or death of a family member
- Changes in your financial situation
- Changes in your agent’s circumstances (e.g., relocation, health issues)
- Changes in Texas law affecting durable powers of attorney
If updates are needed, consult with an estate planning attorney to amend or create a new document. A new one is, in most instances, the better and cleaner option.
Conclusion
Setting up a durable power of attorney is crucial in protecting your finances and ensuring your wishes are carried out if you become incapacitated. You can gain invaluable peace of mind by carefully choosing a trusted agent and working with an experienced Texas estate planning attorney to draft and execute this powerful document.
A well-crafted DPOA allows your hand-picked agent to seamlessly step in and manage your affairs, avoiding needing a stressful and costly guardianship proceeding. Don’t wait until it’s too late – take control of your future by establishing a durable power of attorney today.
Other Related Articles:
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- What is Required for Legal Guardianship in Texas? A Complete Guide
- Can You File for Guardianship Without a Lawyer in Texas?
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FAQs
Having a properly executed DPOA ensures that if you become incapacitated, your chosen agent can immediately step in to handle your financial matters without the need for a time-consuming and expensive guardianship proceeding. It lets you proactively choose who will make decisions for you.
In Texas, you can choose to make your DPOA effective immediately upon signing (non-springing DPOA) or only upon a physician certifying your incapacity (springing DPOA). With a non-springing DPOA, your agent has authority right away, while a springing DPOA prevents them from acting until you are incapacitated.
To be valid, a Texas DPOA must be signed by you in front of a notary public. It should contain specific language stating the power continues upon your incapacity. While not legally required, it’s best practice to also have the document witnessed by two competent adults.
Yes, as long as you are mentally competent, you can modify or revoke your DPOA at any time by executing a new document or a written revocation. You should provide copies of any changes to your agent and financial institutions.
While online forms are available, using them for something as important as a durable power of attorney is not advisable. Even a small mistake can completely invalidate the document. Working with a qualified estate planning lawyer will give you peace of mind that your DPOA is properly drafted and executed by Texas law and your unique needs.
It’s a good idea to review your DPOA periodically, especially if there are changes in your family, finances, or relationship with your appointed agent. If your circumstances or wishes change, meet with your estate planning attorney to modify or update the document accordingly. Keeping your DPOA current is crucial.
