Planning for Disability

You Need a Texas General Durable Power of Attorney. Planning for disability is an important part of your overall estate planning and one part of the plan that many people tend to either overlook or not prepare for well enough. They think having a Last Will is enough, because they never believe they might eventually become incapacitated. We all know that death is inevitable, so after your death almost any matter can be easily handled with a well-drafted Will that properly distributes all your assets and names competent persons to handle those affairs. But what happens if you become incapacitated and remain in that condition for months or even years? Do you have someone you can trust to manage your personal and financial affairs for you while you are still living? Good estate planning means planning for the unexpected, even it the unexpected is unlikely to happen. Two important documents in your disability planning arsenal discussed in previous posts are the Directive to Physicians and the Medical Power of Attorney.

A General Power of Attorney (GPOA) is an important part of the disability planning arsenal. A GPOA is a document that allows a person that you appoint (known in various states as either the agent or attorney in fact) handle the powers set forth in the instrument. The powers given can be very broad (allowing the agent to do practically anything that you could do if you were not incapacitated), or limited (allowing the agent only to do certain acts). Having a GPOA can also eliminate the necessity of having a costly and time-consuming guardianship created, where all matters concerning your finances are governed by the local probate court. Banks, financial institutions, title companies and others are authorized to deal with your agent so there is no disruption in the management of your financial affairs.

Under the old common law, a power of attorney would terminate immediately upon the death or disability of the person (the Principal) creating the power. Death still terminates the power in all states, but now most states provide that the power of attorney can be durable, meaning that the fact that you are incapacitated does not terminate the ability of the agent to act. However, the Principal must specifically provide in the written instrument creating the power that it will be durable. If that language is not there, the power of attorney is only effect if you are not incapacitated.


In addition, the power can be made effective immediately, or it can be made effective only in the event of the Principal’s incapacity. How is incapacity determined? Usually, incapacity can be determined in a written letter signed by the Principal’s treating physician. In most cases, the power of attorney is made effective on disability, since you still have the power to act on all your matters if you are not incapacitated. However, some people have physical disabilities that make it difficult to go to the bank, write checks or sign documents, so having a power that is effective immediately makes sense for them.

Trustworthy and Competent

In naming an agent to handle your affairs, make sure the person you name is trustworthy and competent. Since the agent can do anything with your assets that you could do, they also have the ability to write checks to themselves or for their own benefit. Conflicts could arise between the agent and other people who might have an ultimate claim to your estate at your death. For example, you might name one of your three children as your agent, and that child goes out and writes large checks for his own benefit. The other two children get wind of this and sue their sibling for his mishandling of the power. Mismanagement is rare, but extreme caution should be exercised.

The GPOA in some states must be recorded in the deed records of the county where the Principal resides to be made valid. In Texas, however, the GPOA must be recorded only if it is intended to be used for real property transactions. If the GPOA is recorded, it can only be revoked by a written revocation filed in the same deed records.

Finally, the GPOA is rendered useless if the person you name dies, resigns or becomes disabled. You should therefore consider naming a successor or successors in such an event.