You likely understand the importance of naming a power of attorney (POA) in your estate plan. Without one, Texas courts will name someone to decide on your behalf.
In addition to naming a POA, you must also understand the different types.
Short versus long-term planning
By granting a general POA to someone, you are authorizing them to act on your behalf in various matters, such as handling business operations or conducting financial transactions. It goes into effect immediately and ends when you revoke it, become incapacitated or pass away.
You would typically use a general POA if you are unavailable to handle your own affairs, such as traveling. This ensures that if you are someplace unreachable, everything will run just as if you were there. The person acting on your behalf is only limited by the terms of the agreement.
A durable power of attorney is similar to a general one. However, it remains in effect even if you become incapacitated. A durable POA only ends if you revoke it or pass away. This is typically the type of POA used in long-term estate planning.
To be considered valid in Texas, both types of POA have legal criteria:
- It must be in writing.
- The document must be signed by you or another person at your directive and in your presence.
- You have to be at least 18 years of age.
- The POA must be notarized.
- A durable POA must include specific language stating it will remain in effect even if you become incapacitated.
General and durable power of attorney both have their place in legal and financial planning. A general POA offers flexibility for temporary situations, while a durable one offers assurance for unforeseen events. Either way, reviewing your needs with someone who can help ensure your POA complies with Texas’ regulations is crucial.