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When it comes to estate planning in Texas, the Statutory Durable Power of Attorney is a critical document that deserves careful attention.
This article will dive deep into the Texas Statutory Durable Power of Attorney form, focusing specifically on how to complete it properly, the pitfalls to avoid, and any necessary attachments.
The Structure of the Texas Statutory Durable Power of Attorney Form
The Texas Statutory Durable Power of Attorney follows a specific format prescribed by Section 752.051 of the Texas Estates Code. Understanding the structure of this form is essential before beginning to fill it out:
- Designation of Agent Section: Where the attorney-in-fact is named
- Grant of Authority Section: Where the specific powers granted are specified
- Special Instructions Section: Where the authority can be customized
- Effectiveness of Power of Attorney: Where it’s determined when the powers take effect
- Termination Provisions: Detailing when the powers end
- Signature and Notarization Section: Making the document legally binding
This standardized structure ensures the document will be recognized by financial institutions and third parties throughout Texas. Let’s examine each section in detail.
Completing the Designation of Agent Section
The designation of agent section appears at the beginning of the form and requires careful consideration. Here’s what needs to be known:
Primary Agent Information
In this section, the full legal name and address of the primary agent (often called the “attorney-in-fact”) must be provided. This should include:
- Full legal name (as it appears on government-issued ID)
- Current physical address (not a P.O. Box)
- Contact information
Many people make the mistake of using nicknames or incomplete addresses. For example, writing “Bob Smith” instead of “Robert James Smith” or providing only a street address without the city, state, and zip code. These seemingly minor omissions can create complications when the agent attempts to use the document.
Co-Agents vs. Successor Agents
The Texas Statutory Durable Power of Attorney form allows for the appointment of co-agents (who serve simultaneously) and successor agents (who serve in sequence if prior agents cannot). Understanding this distinction is critical:
- Co-Agents: When appointing co-agents, it must be specified whether they can act independently or must act jointly. If this instruction is missing, Texas law presumes they must act jointly, which can create practical difficulties.
- Successor Agents: When naming successor agents, clearly indicate the order of succession with language such as “If my primary agent is unable or unwilling to serve, I name [Name] as my successor agent.”
A common mistake is failing to distinguish between these two types of appointments, creating ambiguity about whether multiple named agents can act simultaneously or must wait until a predecessor is unable to serve.
Understanding the Grant of Authority Section
The grant of authority section is perhaps the most critical part of the Texas Statutory Durable Power of Attorney form. This section uses a “checklist” format where the principal initials next to the powers they wish to grant.
Initialing the Powers
The form presents a list of powers that can be granted to the agent, including:
- Real property transactions
- Tangible personal property transactions
- Stock and bond transactions
- Commodity and option transactions
- Banking and other financial institution transactions
- Business operating transactions
- Insurance and annuity transactions
- Estate, trust, and other beneficiary transactions
- Claims and litigation
- Personal and family maintenance
- Benefits from governmental programs or civil or military service
- Retirement plan transactions
- Tax matters
- Digital assets and electronic communications
For each power to be granted, the principal must initial the corresponding line. A common mistake is checking boxes instead of initialing, which may invalidate that particular grant of authority. Another error is initialing some powers but leaving others blank without considering the implications.
The “Hot Powers”
Certain powers, often called “hot powers,” require special attention because of their potential for abuse. These include:
- Creating, amending, revoking, or terminating a trust
- Making a gift to someone other than the principal
- Creating or changing rights of survivorship
- Creating or changing beneficiary designations
- Delegating authority granted under the power of attorney
- Waiving the principal’s rights as a beneficiary of a joint and survivor annuity
- Exercising fiduciary powers the principal has authority to delegate
Under Texas law, these powers must be expressly granted with specific initials for each power. Many people overlook these special powers or fail to initial them specifically, only to discover later that their agent lacks authority for important transactions.
The “Catch-All” Power
The Texas form includes an option to initial a statement granting “all of the above powers.” While this seems convenient, it can be dangerous without careful consideration. If this option is chosen, each power should still be reviewed individually to understand the broad authority being granted.
Special Instructions Section: Customizing Your Power of Attorney
The Special Instructions section allows for tailoring the document to specific needs. This blank space is where one can:
- Limit General Powers: For example, “My agent may only sell my real property located at [address] and no other real property.”
- Expand on Powers: For example, “In addition to the powers initialed above, my agent may also manage my digital assets, including cryptocurrency accounts.”
- Add Accounting Requirements: For example, “My agent must provide an accounting of all transactions undertaken on my behalf to my children on a quarterly basis.”
- Specify Compensation: For example, “My agent shall be entitled to reasonable compensation for services performed as my agent.”
A common mistake is leaving this section blank when customization is needed, or conversely, adding instructions that contradict the initialed powers, creating confusion about the agent’s actual authority.
Sample Special Instructions Language
Here’s a sample of effective special instructions language:
“The agent is expressly authorized to access, use, and control digital devices, including but not limited to, desktop computers, laptops, tablets, peripherals, storage devices, mobile telephones, smartphones, and any similar digital device.
The agent may access, modify, delete, control, transfer and otherwise deal with digital assets, including but not limited to, emails received, email accounts, digital music, digital photographs, digital videos, software licenses, social network accounts, file sharing accounts, financial accounts, banking accounts, domain registrations, web hosting accounts, tax preparation service accounts, online stores, affiliate programs, other online accounts, and similar digital items.
The agent is specifically authorized to communicate with the custodians of digital assets, to access, handle, distribute and dispose of those digital assets, and to take any actions the principal could take under the terms of service of any account related to digital assets.”
Signature and Notarization: Making the Document Legally Valid
The final section of the Texas Statutory Durable Power of Attorney requires proper execution:
- Principal’s Signature: Must be signed by the principal or by another adult in the principal’s presence and at the principal’s direction if physically unable to sign
- Date: The date of signing must be clearly indicated
- Notarization: The signature must be acknowledged before a notary public
- Witnesses: While witnesses are not required by Texas law for a power of attorney, some institutions may prefer or require witnessed documents
Common Execution Mistakes
Frequent errors in this section include:
- Improper notarization: The notary must witness the signature and complete the acknowledgment correctly
- Missing dates: Failing to date the document can create questions about when it was executed
- Pre-signing: Signing the document before going to the notary (it must be signed in the notary’s presence)
- Agent signatures: While some states require the agent to sign accepting the appointment, Texas does not—but adding an agent’s signature page as an attachment can help with acceptance by financial institutions
Required Attachments and Additional Forms
The Texas Statutory Durable Power of Attorney is complete in itself and does not require additional attachments by law. However, certain supporting documents can be helpful:
Agent Acceptance Form
While not required, an agent acceptance form signed by the designated agent can help financial institutions feel more comfortable accepting the power of attorney. This form typically includes:
- Agent’s acknowledgment of fiduciary duties
- Agent’s specimen signature
- Agent’s contact information
Physician’s Certification of Incapacity
If a springing power of attorney has been chosen, preparing a template physician’s certification form can simplify the process when needed. This form should align with the language in the special instructions defining incapacity.
Property Schedules
For complex estates, attaching a schedule of property can clarify what assets are covered by the power of attorney. This is particularly helpful when the agent’s authority has been limited to specific assets.
Conclusion
The Texas Statutory Durable Power of Attorney is a powerful tool in estate planning, but its effectiveness depends entirely on how carefully and correctly it’s completed. By understanding each section of the form, avoiding common mistakes, and considering appropriate attachments, a document can be created that serves its intended purpose: allowing the chosen agent to effectively manage affairs when needed.
Remember that while the statutory form provides a solid foundation, consulting with a qualified Texas estate planning attorney can help ensure the document is customized to specific needs and properly executed. The relatively small investment in professional guidance can prevent significant complications and expenses for all parties involved in the future.
Other Related Articles:
- How to Get Guardianship of a Child in Texas: A Complete Guide
- Does Texas Recognize Out of State Guardianship? A Step-by-Step Guide
- What is Required for Legal Guardianship in Texas? A Complete Guide
- Can You File for Guardianship Without a Lawyer in Texas?
- A Texas Guide to Adult Guardianship for Families
- How Long Does Temporary Guardianship Last in Texas
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- Step-by-Step Guide: How to Apply For Legal Guardianship in Texas
- How to Get Guardianship of a Parent in Texas: A Comprehensive Guide
- How to Get Legal Guardianship of a Grandchild in Texas: A Step-by-Step Guide
FAQs
No, recording is not required for validity in Texas. However, recording the document with the county clerk where real property is owned can be beneficial if the original is lost and the agent needs to conduct real estate transactions.
A Texas Statutory Durable Power of Attorney remains valid until it is revoked, the principal dies, the agent resigns or becomes incapacitated, a guardian is appointed for the estate, or until a termination date specified in the document.
Yes, multiple co-agents who serve simultaneously or successor agents who serve in sequence if prior agents cannot can be named. When naming co-agents, it must be specified whether they can act independently or must act jointly.
To revoke a Texas Durable Power of Attorney, create a written revocation statement, sign it before a notary, and deliver copies to all parties who have the original document. If the original was recorded, record the revocation in the same county records.
A Medical Power of Attorney authorizes someone to make healthcare decisions for the principal if incapacitated, while a Durable Power of Attorney authorizes someone to handle financial and legal matters. These are separate documents with different purposes, and most comprehensive estate plans include both.
Only if specifically authorized through this “hot power” in the document. Self-gifting is not automatically granted and requires explicit authorization, typically through initialing the appropriate section and possibly adding clarifying language in the special instructions.
No, a non-statutory form prepared by an attorney can be used. However, the statutory form offers certain advantages, including a presumption of validity and acceptance by third parties. Financial institutions are generally more familiar with the statutory form.
Possibly, but it depends on the laws of the new state of residence. Some states recognize powers of attorney executed in other states, while others do not. If relocating, it’s advisable to have documents reviewed by an attorney in the new state.
