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7 Surprising Facts You Should Know About Being an Agent Under a Power of Attorney

Updated: 6 days ago


Houston Power of Attorney Lawyer
7 Facts You Should Know About Being a POA

A power of attorney is a legal document that enables you to appoint someone else to act on your behalf. As an agent under a power of attorney, you are authorized to make important decisions for someone who cannot do so themselves.


However, the authority granted in a power of attorney is not limitless; these documents only give the agent authority over specific things and should be used judiciously. If you are a current or soon-to-be agent under power of attorney or planning your estate to include a power of attorney document, here are seven facts to help you get off on the right foot.


#1 There are 5 Types of Power of Attorney Documents


The rights and responsibilities of the person acting as the agent will be determined by the type of power of attorney in effect.


Here are five:

  1. General power of attorney — Allows someone to act on your behalf in every way Texas law allows. They can buy your groceries, water your plants, and even make financial decisions for you which is why some people often call it “full” power of attorney. These documents can be durable or non-durable.

  2. Limited or special power of attorney — Allows someone to carry out specific tasks for you, such as managing investments or paying bills on time, without consulting anyone else.

  3. Springing (non-durable) power of attorney — A type of power of attorney that only goes into effect after a person has become physically or mentally disabled or incapacitated

  4. Durable power of attorney A type of general power of attorney that continues despite subsequent disability or incapacity

  5. Medical Power of Attorney — a type of limited or special power of attorney that allows the agent to make medical decisions on behalf of the adult principal (or “attorney in fact”)


The person acting as an agent could be a family member, a neutral third party, or anyone else the principal chooses.


#2 An Agent’s Authority is Not Limitless


The agent’s authority is limited to specific powers granted in the power of attorney document. Even general power of attorney documents that grant agents broad powers are limited by their fiduciary duty to act in the principal’s best interests.


Suppose one were to execute a power of attorney for financial matters with more than one agent, one for banking and one for stocks, neither of whom has any authority over real estate or motor vehicles. In that case, the authorized agents are limited to making financial transactions involving only those things that they have been appointed to handle—nothing more, nothing less.


#3 The Principal Must Be Capable of Making Their Own Decisions to Create a Power of Attorney


To sign a power of attorney form, the principal—the person who creates it—must have the legal capacity to do so. This means they must be of sound mind and capable of making their own decisions regarding financial and personal care.


In Texas, a durable power of attorney document must be signed by the adult principal or in the adult principal’s conscious presence by another adult to be considered valid. This is important because if the principal doesn’t understand what they’re doing, they could end up giving away all their money or have someone else make uninformed decisions for them.


#4 Power of Attorneys Are Fully Revocable


The principal can revoke a power of attorney at any time in writing—even after the agency has begun. Revocation begins immediately, and principals are not required to provide advance notice.


To revoke a power of attorney in Texas, you must:

  1. Have the mental capacity to know what you’re doing

  2. Prepare a written statement of your revocation

  3. Inform your agent that you have revoked the power of attorney

  4. Inform anyone working with the agent that you have revoked the power of attorney


#5 A Power of Attorney is Not the Same as Guardianship


A power of attorney document is not intended to be used as a substitute for guardianship. Guardianship grants an individual rights and responsibilities over another person and their property, much like a parent’s rights and responsibilities to their children.


When the court appoints a guardian, the incapacitated person (“ward”) is stripped of their rights and abilities to make any decisions for themselves. Whereas, when you create your own power of attorney, you can set forth specific powers for your agent, leaving yourself some autonomy.


#6 The Power of Attorney May Not Go Into Effect Immediately


Most power of attorney documents is not intended to be used right away.

Although you may expect that once the principal signs off on a power of attorney, it would instantly go into effect, remember: the fact that you have the authority to make decisions on another person’s behalf typically means nothing unless they cannot make those decisions themselves. And the most common way for this to happen is when they become incapacitated or unable to care for themselves.


#7 You Can Be Held Liable for Your Actions as an Agent


Agents have the fiduciary duty to act in good faith and with the principal’s best interest in mind, and as such, you can be sued for malpractice.

Suppose you have acted as an agent for a while now, and so far, so good. But then you find yourself behind on your mortgage payments, between a rock and a hard place, and you decide to use their money to catch up because, after all, how could you perform your duties with no place to live?


But here is the thing: when you are appointed as an agent under power of attorney, you are legally allowed to make decisions on behalf of another person—a huge responsibility. And if those decisions are not beneficial or cause harm in any way, you will be held liable.


Don’t Be Left Guessing About Your Power of Attorney Document — Contact Your Legacy Legal Care™ Today


A power of attorney document is not an insurance policy; it does not protect you from liability in the event that you are sued. It is not a will or estate plan since, if you die, your agent’s authority ceases.


But it is still a vital document to have should anything happen to you in the meantime. It gives someone else temporary control over your finances, assets, or medical decisions while still allowing you some measure of freedom.


So, there you have it—the top seven surprising facts you should know if you’re considering becoming an agent or drafting a Texas durable power of attorney.


Still, have questions about power of attorney documents or the role of an agent? Do not hesitate to ask an experienced member of our team by calling our law firm at (281) 218-0880 or contacting us here.

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