In Texas, a person who wants to appoint someone else to act on his or her behalf in financial transactions can use a statutory durable power of attorney. The person making the durable power of attorney is called the “Principal”. And the person appointed by the Principal to act on the Principal’s behalf on the financial transactions, is called the “Agent”. A durable power of attorney authorizes an agent to engage in certain financial transactions on behalf of the principal.
To be valid in Texas, a durable power of attorney must be signed by the Principal (or by someone he directs to sign in his presence if he is physically unable to sign) and his signature must be acknowledged by a notary.
A true durable power of attorney becomes effective once the principal signs the durable power of attorney and is not affected by the principal’s later incapacity. A power of attorney that is effective only in the event of the principal’s incapacity is called a “springing power of attorney”.
An agent acting under a durable power of attorney is considered a fiduciary. An agent acting under a durable power of attorney has many fiduciary duties and could be held personally liable for violating his or her fiduciary duties. Although a durable power of attorney can be a very helpful tool for families needing to assist a loved one, a durable power of attorney can be easily abused by an unscrupulous agent. Principals with underlying medical conditions that cause physical or mental disability are particularly vulnerable to financial exploitation by self-interested and irresponsible agents. Thus, it is important when making a durable power of attorney to consult with an estate planning attorney about the terms of the durable power of attorney, who will act as the agent under the durable power of attorney, and what transactions and powers the agent should have under the durable power of attorney. Law Office of Adriane S. Grace, PLLC provides assistance and advice with Durable Power of Attorney documents.
