Power of Attorney

Powers of Attorney…

During the initial conference with clients who come in to discuss wills, most attorneys will suggest they may want to consider a Power of Attorney (POA), which actually creates an agency.  The person who creates the  POA is the Principal, and the person named as agent for the Principal is the Attorney-In-Fact. There are many types of POAs, but the most commonly used one in Texas is the Statutory Durable Power of Attorney.  “Statutory,” refers to the fact that the form has been approved by a statute passed by the state legislature.  “Durable,” means that it’s still effective if the Principal later loses mental capacity.


If a person becomes unable to handle his or her legal affairs, perhaps because of Alzheimer’s Disease or a serious incapacitating illness, the law has a process which provides for the appointment of a Guardian for the individual Ward.  Unfortunately,  this can be cumbersome and expensive, requiring filing an application in probate court, legal notice to the proposed Ward, the appointment of another independent attorney called and Attorney Ad Litem to protect the proposed Ward, medical evidence that a Guardianship is needed, posting a bond, filing an inventory, and applying for permission to sell assets or spend funds. These requirements are designed to protect the Ward, and may have to be maintained at additional expense as long as the Guardianship lasts, which could be years or even decades. That’s why If there’s someone, like your spouse or an adult child that has your complete trust, you can execute a POA, which may save a lot of money, time and legal complexities. For long term marriages, spouses frequently execute reciprocal POAs.

Most POAs are immediately in effect when signed, whereas some “spring” into effect upon the occurrence of some event.  Either way, a POA ceases to be effective when the principal dies, so it’s not a substitute for a Will..

Although most POAs are effective when signed, they may never be needed or used until a disability of the Principal requires their use. However, there is risk of misuse, which is explained during the interview. A POA gives the agent the authority to act for the principal, but it also creates a fiduciary relationship which carries with it a duty to always put the interests of the principal first, and a breach of that duty can lead to a serious lawsuit against the agent for breach of fiduciary duty . Detailed records should be kept by the agent, and if the principal can put instructions in writing, so much the better..


The Statutory Durable Power of Attorney gives the Principal the option of choosing which types of legal powers are being given to his or her  agent, but since you never know what powers will be needed, its common for the POA to give the agent the power to perform virtually any legal acts to the same degree that the principal could.

Specific or limited POAs authorize one or more specific legal acts, such as buying real estate or selling stocks. If you own real estate or stocks, especially if in one name only, a specific POA may be a good idea.

A POA can be revoked at any time by executing a written revocation, at which time the agent needs to be notified of the revocation in writing.  It’s also prudent to notify any entity — like a broker or bank — of the revocation, especially if that entity has been acting at the direction of the agent.