2777 Allen Parkway, #1200
Houston, TX 77019
(832) 509-0445

What is a Durable Power of Attorney in Texas?

Situations may arise in which one would not be able to make important financial and legal decision. When these situations arise, individuals need to consider who would be ideal for making those decisions. Could one appoint another individual to make those decisions in Texas? Let’s see.

Business Law 101 Series, by Top Business Attorneys (832) 509-0445.


What is a Durable Power of Attorney in Texas?

As mentioned above, situations and circumstances may arise that keep an individual from making important legal and financial decisions. The Texas legislature has created a form that appoints another individual or agent that could make those important decisions. This form is widely referred to as a durable power of attorney.

Why is the Durable Power of Attorney Beneficial?

In an unfortunate situation in which one may no longer be able to make important decisions, the durable power of attorney will allow the individual (the “principal”) appoint another individual or individuals (the “agent”) to make decisions on the principal’s behalf.

It is important to understand that the durable power of attorney can give the agent broad or narrow powers. If an agent is to handle all affairs, then granting broad powers will be more beneficial.

Can the Durable Power of Attorney be Limited by Duration?

Once the principal indicates the agent, the form must be signed in front of a notary public. The principal may indicate when the durable power of attorney is to take effect and limit its duration. It is important to note that the durable power of attorney will be effective indefinitely unless the principal indicates otherwise.

The durable power of attorney may also be limited by a marital divorce. This is best illustrated through an example. Suppose the principal indicates the agent as his wife. Upon divorce, the durable power of attorney will terminate, unless otherwise expressed in the document.

What Significance does a Durable Power of Attorney Have in Texas?

As per Texas law, when a durable power of attorney is used by the agent, any third party that relies on the actions of the agent through the power of attorney is not liable to the principal. This is also best illustrated through an example. Suppose a principal appoints an agent through a durable power of attorney and the agent drains the principal’s bank account. The bank of which the agent withdrew, is not liable to the principal for the funds withdrawn, regardless of whether the principal approved this action. This is because, under the durable power of attorney gives the agent the power to do so and the bank relied on a valid document.

SIMILAR TOPICS INCLUDE…

  1. Legal Contract Checklist
  2. LLC Operating Agreements
  3. Texas Business Law Articles 101

What duties does the Durable Power of Attorney Create?

The durable power of attorney gives the agent a fiduciary duty, a duty to inform, and a duty to maintain all records of all actions take with the property. The principal has the ability to demand accounting of the property and to take legal action if the principal refuses to provide the accounting.

The principal has the authority to revoke the durable power of attorney at any time. The principal must provide notice of the revocation to all third parties that might rely on the durable power of attorney.

What Implications does a Durable Power of Attorney have in Real Estate?

In the event that an agent sells property with the authority of a durable power of attorney, then the durable power of attorney must be recorded along with the documents of the transaction.

What Makes a Durable Power of Attorney and a Non-Durable Power of Attorney Different?

It is important to note the differences between a durable and a non-durable power of attorney. A non-durable power of attorney creates a principal and agent relationship, however the relationship is limited to a set period of time for a particular transaction. Once the transaction is complete, or the principal becomes incapacitated or deceased, the non-durable power of attorney will cease.

Although a durable power of attorney also creates a principal and agent relationship, the powers given to the agent are broader. The durable power of attorney will come into effect at the time the principal indicates or upon the incapacitation of the principal. The durable power of attorney is indefinite unless the principal becomes deceased, or is indicated otherwise in the document.