Important Power of Attorney Information

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A power of attorney (“POA”) is a document that allows you to appoint a person or organization to manage your property, financial, or medical affairs on your behalf. In Texas, we cannot combine a medical POA and a financial POA, they have to be in separate documents. If you have created a POA (or POAs) already, depending on when it was originally created, you may need to create a new one.

Prior to 1972, POAs were much less reliable than they are today. At that time, your POA was terminated upon disability – which is when you need one the most. However, on January 1, 1972, the Texas Legislature passed into law the former Probate Code Section 36A which would permit “durable” powers of attorney that remained effective even after disability.

In 1993, the Probate Code Section 36A ended. Texas’ Statutory Durable Power of Attorney Act replaced Section 36A, effective September 1, 1993. Changes to the form usually occur each legislature session (so about every other year). Some of those changes are minor, some are significant.

What does all of this mean for you? Well for one, if you signed either a financial or medical POA prior to 1972 and have not created a new one since, you need to. If you created either a financial or medical POA between the years of 1989 and 1993, you need to check to make sure it was recorded properly and if it was not, create a new one. Additionally, the Texas Legislature made some significant changes to the statutory “form” of the financial POA in 2014 and 2017, so if you have a financial POA dated before 2017, it is usually our recommendation to have a new one prepared.

Why is it important to keep your POA up-to-date even if it was created after these changes?

Depending on how you set up your original POA or POAs, they may be expired. When you create a POA now, your POA you can set a date for it to expire, or you can have it be effective immediately or upon your incapacity and then it would expire upon your death.

You can avoid the issue of having it expire upon incapacitation by creating a durable power of attorney. The durable power of attorney is considered effective even if you become incapacitated. This allows someone to manage your medical or financial affairs on your behalf. If you do not have a durable power of attorney for medical or financial matters in place when you become incapacitated, then a guardianship proceeding will be necessary so that someone can manage your affairs. Essentially, a guardianship proceeding is where someone has to go get the court’s permission every time they need to handle your medical or financial affairs.

Also, if your POA is not kept up-to-date and the appointed person tries to say for example, take your financial POA to the bank to be given control of your bank account to pay your bills on your behalf, the bank may look at the POA document and look at the signed date. If your document is several years old, the bank may require a new POA document before they give access to the account. The bank may be worried that an older POA might have been revoked and is no longer valid. They do not want to take the risk of giving you access to the account if they are not sure you should have access. Therefore, it is important that you review and sign a new POA every few years if possible to avoid this potential issue.

If you have any questions about your medical or financial POA, please contact Heirloom Legal to schedule a consultation.