A power of attorney (POA) plays a key role in legal and financial matters, but many people misunderstand its function. These misconceptions cause confusion and legal issues. Understanding the truth about POAs helps you make informed decisions.
A power of attorney loses validity after death
A POA automatically ends when the person who granted it (the principal) dies. Many people assume an agent can continue acting on their behalf, but only an executor or administrator can manage the estate at that point.
An agent follows strict limitations
A POA does not grant unlimited power. The document outlines the agent’s authority. In Texas, the agent must act in the principal’s best interest and follow the instructions in the POA.
A POA does not cover all decisions
A POA can be specific or general. A limited POA only grants authority for certain tasks, like selling property or handling a single financial transaction. If the document does not include medical decisions, the agent cannot make those choices.
A POA does not take effect immediately
Many people think a POA activates as soon as they sign it. However, a springing POA only becomes active under certain conditions, like when a doctor certifies the principal’s incapacity. Texas law allows both immediate and springing POAs.
A POA remains revocable
A principal can revoke a POA at any time if they remain mentally competent. They must notify the agent in writing and inform any institutions that received a copy of the document.
Understanding these misconceptions ensures your POA functions correctly and protects your interests.
