A power of attorney lets someone you trust handle your money and property if you cannot, or simply do not want to. It is one of the most useful documents in an estate plan. It is also one of the most misused.
This guide explains how a Texas durable power of attorney works, what an agent can and cannot do, and where families run into trouble. It is general education, not legal advice for your situation.
What a power of attorney is
A power of attorney is a document where you, the principal, name an agent to act for you. The agent can only do what the document allows.
In Texas, the rules for financial powers of attorney are in Subtitle P of Title 2 of the Texas Estates Code. Chapter 751 covers durable powers of attorney in general. Chapter 752 sets out an optional statutory form.
Durable, and what that means
"Durable" means the agent's authority keeps working if you become incapacitated. Without that, a power of attorney would fail at the moment you most need it.
Texas does not assume durability. Under Section 751.0021, the document must say so, with wording such as "This power of attorney is not affected by subsequent disability or incapacity of the principal." The statutory form includes this language.
What it takes to sign one
A durable power of attorney must be in writing and signed by you, an adult. It must also be acknowledged before a notary or other authorized officer. A document that skips the notary step may not qualify as a durable power of attorney.
If an agent will handle real estate, there is one more step. A power of attorney used for a real property transaction must be recorded with the county clerk where the property is located. Texas sets a deadline of 30 days after the related document is filed for recording (Section 751.151).
The statutory form
Texas offers a statutory durable power of attorney form in Section 752.051. Using it is optional. It lists categories of authority, such as real property, banking, insurance, taxes and digital assets, and you initial the ones you grant.
The form opens with a warning that the powers are broad and sweeping. It also says the form does not authorize health care decisions.
The statutory form is a starting point, not a plan. Many families need custom language, which we explain below.
Immediate or springing
A power of attorney can take effect in one of two ways:
- Immediate. The agent's authority starts when you sign. This is what the statutory form assumes if you do not choose otherwise.
- Springing. The authority starts only if you become disabled or incapacitated. The form says this is generally shown by a physician's written certification, unless the document defines it differently.
A springing power sounds safer, but it can cause delays. A bank may want proof of incapacity before it acts. Which type fits depends on your family and on who you trust.
What an agent can and cannot do
The agent's authority comes from the document. If a power is not granted, the agent does not have it.
Gifts are a common example. Unless your document says otherwise, an agent's authority to make gifts is limited to the annual federal gift tax exclusion for each person. Gifts must also follow your known goals or, if unknown, what is in your interest (Section 751.032).
Other limits to know about:
- No health care decisions. A financial power of attorney does not cover medical choices.
- No acting outside the document. The agent cannot expand the powers on their own.
- Real estate has its own steps. Deeds and loans have signing and recording rules. The statutory form says that if you want your agent to sign home equity loan documents for you, you must sign the power of attorney yourself at the office of the lender, an attorney or a title company.
An agent's duties
An agent is a fiduciary when acting under the power of attorney. That means acting in good faith, within the authority granted, and in your interest.
The agent must also tell you promptly about actions taken under the document, keep records and give an accounting when asked. The statutory form adds that an agent who breaks these rules may face liability for damages.
Choose an agent for judgment and honesty, not just for closeness. Consider naming a successor agent in case the first one cannot serve.
Medical decisions are a separate document
A financial power of attorney does not let anyone speak to your doctors or make treatment decisions. In Texas, that is done with a separate medical power of attorney under the Texas Health and Safety Code.
A medical power of attorney names someone to make health care decisions if you cannot. Other documents often go with it:
- A directive to physicians. This states your wishes about life-sustaining treatment. It is signed before two qualified witnesses or acknowledged before a notary.
- A HIPAA authorization. Federal privacy law generally requires your written permission before a provider shares your health information with others.
Read our guide on the medical power of attorney in Texas.
What happens without one
If you become incapacitated with no power of attorney, your family may have to ask a court for a guardianship. A guardianship starts with a sworn application to a court. The application must say whether alternatives were considered.
Texas law lists a durable power of attorney and a medical power of attorney among the alternatives to guardianship (Section 1002.0015). Having them in place before a crisis can help your family avoid that court process.
When a power of attorney ends
A power of attorney can end in several ways. Section 751.131 lists these, among others:
- You die. Agent authority does not continue after death. Your will or trust takes over.
- You revoke it.
- The document says it ends on a certain date or event.
- Its purpose is accomplished.
- A court appoints a permanent guardian of your estate.
An agent's own authority also ends in certain cases (Section 751.132). It ends if the agent dies, resigns or becomes unable to serve. If the agent is your spouse, a divorce or annulment ends the authority, unless the document says otherwise.
If you revoke a power of attorney, tell the bank and anyone else who has a copy. The statutory form says a revocation does not bind a third party until it has actual knowledge of it.
Why generic online forms cause problems
Online forms are easy to find. Many of them fail when a family needs them. Here is what we see:
- Missing powers. A form may leave out gifting authority, trust funding, digital assets or the right to deal with retirement accounts.
- Wrong fit. A form written for another state, or for no state, may not follow Texas execution rules.
- Banks push back. Since 2017, Texas law gives a third party certain options before accepting a power of attorney. It may ask for an agent's certification, an opinion of counsel or an English translation (Section 751.201).
- Valid reasons to refuse. The law lists situations where a bank may say no, such as a good-faith belief that the document is invalid (Section 751.206).
A clear, well-drafted document gives institutions fewer reasons to hesitate. If a bank refuses without a valid reason, Texas law lets the agent ask a court to order acceptance (Section 751.212).
How it fits with the rest of your plan
A power of attorney is one piece. It works with a will or trust, a medical power of attorney and beneficiary designations. If one piece contradicts another, your family pays the price. Read our overview of estate planning in Texas, or the Spanish version of this guide, poder notarial en Texas.
Next step
Not just documents. A strategy for everything you've built. In your Alers Legacy Strategy Session, Attorney Alers and our team review your family, assets and goals. Then we recommend the documents that fit. We serve families across Texas, in person in the DFW area or by video. Learn more about our estate planning work.
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FAQs
What is the difference between a power of attorney and a durable power of attorney in Texas?
A durable power of attorney keeps working if you become incapacitated. In Texas, the document must say so. The statutory form includes that language.
Does a Texas power of attorney have to be notarized?
Yes. A durable power of attorney must be signed by an adult principal and acknowledged before an authorized officer, usually a notary.
Does a power of attorney cover medical decisions?
No. A financial power of attorney does not cover health care. In Texas, that takes a separate medical power of attorney.
Does a power of attorney continue after death?
No. The principal's death ends the power of attorney. After that, the will, trust or other estate documents control.
Can a bank refuse to accept my power of attorney?
Sometimes. Texas law lets a bank ask for an agent's certification, an opinion of counsel or a translation first. It also lists limited reasons to refuse. A wrongful refusal can be challenged in court.