Understanding Statutory Durable Power of Attorney in Texas

The statutory durable power of attorney (DPOA) is an essential legal document for estate planning in Texas.

This legal instrument plays a vital role for Texas residents by ensuring their affairs are managed according to their wishes, even if they become incapacitated.

What is a Statutory Durable Power of Attorney?

The term “statutory” simply means it follows a specific form provided under Texas law – Texas’s statutory form of durable power of attorney is found in Section 752.051 of the Texas Estates Code.

“It is a financial durable power of attorney - this means that it only allows the agent to handle financial matters. It does not permit the agent to make decisions about the principal's health care,” says the Texas State Law Library. “A durable power of attorney is one that either takes effect upon or lasts after the principal's incapacitation. This is different from a general power of attorney, which would terminate at this point.”

Basically, a statutory durable power of attorney is a legal document that allows you (the principal) to appoint someone you trust (the agent or attorney-in-fact) to manage your financial and legal affairs.

Note, that for health and medical care decisions, a medical power of attorney is needed in Texas for estate planning.

Why a Statutory Durable Power of Attorney is Important

A statutory durable power of attorney is important and a core component of estate planning for several reasons:

• Continuity of Financial Management: It ensures your financial matters are handled smoothly, even if you're unable to manage them yourself.
• Avoiding Guardianship: Without a DPOA, your family might need to go through a costly and time-consuming court process to appoint a guardian if you become incapacitated.
• Flexibility: You can tailor the powers granted to your agent, giving you control over what they can and cannot do on your behalf.
• Peace of Mind: Knowing that someone you trust will manage your affairs according to your wishes can provide significant peace of mind.

“Taking the time to make these documents is well worth the small effort it will take. If you haven’t made durable powers of attorney and something happens to you, your loved ones likely will have to go to court to get the authority to handle your affairs,” explains the legal website Nolo.

Key Features of Statutory Durable Power of Attorney

Here are some of the key features of the statutory durable power of attorney in Texas:

Authority Granted

The DPOA in Texas can grant extensive authority to your appointed agent. This may include:

• Managing bank accounts and other financial assets, including digital assets.
• Paying bills, taxes and handling personal and family maintenance.
• Buying, selling, or managing real estate.
• Making investment decisions, including stock and bond transactions.
• Handling business operations.
• Making insurance and annuity transactions.
• Handling claims and litigation.
• Retirement plan transactions.
• Handling benefits from social security, Medicare, Medicaid, or other governmental programs or civil or military services.

It’s important to note that special instructions may be given to limit or extend the powers granted to your agent.

The Texas statutory durable power of attorney is either effective immediately when executed (and not affected by subsequent disability or incapacity) or becomes effective upon the disability or incapacity of the principal.

Remember, this authority is for financial and legal matters only. For healthcare decisions, you would need a separate Medical Power of Attorney.

Durability

Unlike a general power of attorney, which becomes invalid if you become incapacitated, the DPOA remains in effect. This "durability" is what makes it so valuable in estate planning.

What is Considered Incapacitated in Texas?

The Texas State Law Library says that according to Section 751.00201 of the Texas Estates Code, a person is considered to be "incapacitated" for the purposes of a durable power of attorney if a doctor's examination finds that they are not able to manage their own finances. The doctor must provide a written statement certifying this finding of incapacity.

Legal Requirements

To create a valid statutory DPOA in Texas, you must:

• Be at least 18 years old and of sound mind.
• Sign the document before a notary public.
• Use the statutory form provided by Texas law (or ensure your document contains the required elements).
• You must name the person that you want to be your agent and say how the power of attorney is to be used.

How Long It Lasts

Section 751.131 of the Texas Estates Code, according to the Texas State Law Library, states that a durable power of attorney lasts until:

• The principal dies;
• The principal revokes the power of attorney;
• The conditions of termination specified in the power of attorney have been fulfilled;
• The agent's authority has been terminated under Texas Estates Code 751.132 and the power of attorney does not provide for a replacement; or
• A guardian is appointed for the principal.

If a spouse was appointed as the agent and the couple divorces or the marriage is annulled or declared void, Section 751.132 states that their authority as agent terminates.

Agent’s Duties

In addition to the authority granted actions listed above, the agent acting for a principal in a Texas statutory durable power of attorney has the fiduciary duty to generally:

• Act in good faith.
• Do nothing beyond the authority granted in the DPOA.
• Act loyally for the principal’s benefit.
• Avoid conflicts that would impair their ability to act in the principal’s best interest.
• Disclose their identity as an agent when acting for the principal by writing or printing the name of the principal and signing their own name as “agent”.
• Maintain records of each action taken or decision made on behalf of the principal.
• Maintain all records until delivered to the principal, released by the principal, or discharged by the court.

Sloan Docs Can Help You Create Your DPOA

The nonprofit TexasLawHelp.org recommends that Texans contact a lawyer to get a durable power of attorney done correctly.

“The form must be correct, or it will not be effective. Also, making a durable power of attorney is a big decision. It is important that you have someone who can review the document with you and answer any questions that you may have,” says the nonprofit.

A Statutory DPOA provides peace of mind, ensures continuity in managing your affairs, and can help avoid costly legal processes if you become incapacitated.

At Sloan Docs, our friendly, affordable platform can help you create estate planning documents such as wills, revocable trusts, medical power of attorney, and durable power of attorney. Contact us today to get started on your estate planning.