POWERS OF ATTORNEY
By: James M. Bright
Attorney at Law
The following is provided for informational purposes only and is not, nor should it be construed as legal advice.
Black’s Law Dictionary defines Power of Attorney as, “An instrument authorizing another to act as one’s agent or attorney.”
The term “attorney-in-fact” should not be confused with the term “attorney-at-law.” An attorney-in-fact need not be a lawyer so long as they have authority to act on behalf of another person called “the principal.”
There are powers of attorney for business or property decisions, and other powers of attorney specially intended for healthcare decisions.
Powers of attorney for business/property purposes are divided into two categories as follow:
Special Power of Attorney – This authority is for a particular purpose only and does not give authority for any act not specifically listed. An example of a special power of attorney might be used to authorize someone (your attorney-in-fact) to perform real property transactions. Under this power, they might buy, sell, lease or otherwise acquire or pass a right incident to real property. Under this special power, your attorney-in-fact could not perform other business transactions such as conducting stock or bond transactions, operating a business owned by you, engaging in insurance transactions on your part or any other activity not specifically related to the exact power that you offered.
General Power of Attorney – Under a general power of attorney, you are giving your attorney-in-fact broad authority to transact all of the duties conferred by you of a particular kind or at a particular place.
A document creating a power of attorney may convey general powers, special powers or a combination of both.
A power of attorney may be for a finite and defined period of time or it may contain no such provision and may continue until it is revoked by the principal.
What happens when a principal advises his/her attorney-in-fact that the authority to act is revoked, but the agent/attorney-in-fact continues to deal with third parties as if the revocation had not been made? The revocation does not automatically terminate the apparent authority of the agent/attorney-in-fact to deal with third parties. The third party who does not receive actual notice from the principal of a revocation may be justified in relying upon the document and past dealings between the parties. If a revocation is necessary, it is recommended that you notify all persons who have dealt with the attorney-in-fact, demand return of documents from the attorney-in-fact and file a formal revocation of record in the county records of each county where the power of attorney has been used or might be used.
What happens if a principal marries? As with the death of the principal, the marriage of the principal subsequent to the transfer of power will automatically terminate that power.
What is a Durable Power of Attorney? A durable power of attorney survives the disability or incapacity of the principal, but, as with any instrument requiring informed consent, cannot be executed after a mental disability occurs. This instrument is particularly useful to persons who are concerned or may have reason to become concerned about possible diminished mental or physical capabilities in the future (i.e. all of us). Example: If one spouse suffers from any level of diminished capacity, it may be very helpful to give power of attorney to the unaffected spouse. A durable power of attorney is so called because it survives the change in abilities and will contain words similar to the following:
“This Power of Attorney is not affected by subsequent disability or incapacity of the principal.”
“This Power of Attorney becomes effective on the disability or incapacity of the principal.”
When you give a power of attorney, do you give that person superior rights to make decisions for you? The answer is NO. Unless you have become incapacitated, you as the principal can almost always revoke the power of attorney. (The cases where a power of attorney cannot be revoked are few, very special and far too complex to cover in this writing.) In all but the rarest of situations, a power of attorney can be revoked by the principal at any time.
A common misconception by many in the public is that an attorney-in-fact exercises some sort of authority over the person who is the principal. It should be understood without equivocation that this is not true. Giving another person your power of attorney merely gives them the right to act for you in specific situations. It does not reduce your power to act on your own behalf.
Authority over a person which is deemed to be superior over the rights of that individual is not the subject matter of a power of attorney. Such authority over another person would be subject matter in a guardianship proceeding and should only be attainable after a hearing on the merits by a court of competent jurisdiction. A power of attorney does not equate to a guardianship and should never be confused.
Persons who assist us by acting as our agent/attorney-in-fact can serve a very useful purpose in handling certain designated tasks for us. Great care should always be taken when selecting such a person.
Healthcare Power of Attorney – A very special type of power is the healthcare power of attorney. This instrument does not authorize anyone else to make medical decisions for you until and unless you are unable to do so for yourself.
It is almost certain that each of us will need to have another person act for us for some purpose at some time in our lives. If you wish to decide for yourself who that person should be and to what extent they may act or not act, then you may wish to designate your attorney-in fact and dictate what powers they may exercise on your behalf.
James Bright is admitted to practice before the Federal Courts for the Southern District of Texas and Eastern District of Texas as well as all of the Justice Courts, Probate Courts, County Courts at Law, District Courts, Courts of Appeal and Supreme Court for the State of Texas. He maintains an office in Houston and by appointment another at208 McCown Street
in the heart of historic Montgomery. Contact may be made by telephone (936) 449-4455 or (281) 586-8277. For more information about wills or probate in Texas, please see- www.houstontxprobate.com