Detailed Answer

Under Texas law, a properly executed durable financial power of attorney (POA) can give the person you name (the agent or attorney‑in‑fact) broad authority to manage most of your financial affairs if you become unable to do so yourself. The Texas Estates Code governs powers of attorney; see the statute chapter for the rules that apply: Texas Estates Code, Chapter 751 (Power of Attorney).

Below are the common authorities that a Texas financial POA can grant, the typical limitations, and important duties the agent must follow.

Common authorities an agent can exercise

• Banking and cash management: access and manage checking and savings accounts, open and close accounts, sign checks, deposit or withdraw funds, endorse checks, and handle online banking for the principal.
• Bill payment and household expenses: pay bills, manage utilities, contract for and pay household services, and arrange for routine living expenses.
• Real estate transactions (if granted): buy, sell, mortgage, lease, or manage real property on the principal’s behalf. Many institutions require the POA to be notarized and may require recording for real estate transactions.
• Investment and securities management: buy, sell, trade, or manage stocks, bonds, mutual funds, and other investments; direct an investment advisor if authority is given.
• Business operations: operate, sell, or dissolve a business the principal owns if the POA specifically authorizes business acts.
• Taxes and government benefits: prepare, sign, and file tax returns; represent the principal before tax authorities; apply for, collect, or continue benefits (Social Security, Medicare-related matters) if the POA includes such authority.
• Insurance and claims: file and settle insurance claims, pay premiums, and handle related matters.
• Retirement and bank accounts: manage IRAs, 401(k)s, and other retirement accounts to the extent the account custodian allows an agent to act under a POA (some institutions require a separate designation or additional paperwork).
• Access to records and property: obtain copies of financial records, safe‑deposit boxes (often requiring bank procedures), and other documents needed to administer finances.
• Litigation and claims: start, defend, or settle lawsuits relating to the principal’s financial affairs if the POA grants authority to pursue claims.
• Hire professionals: retain accountants, attorneys, financial advisors, or other agents to assist in managing financial matters.

Typical limitations and powers that usually require express authorization

Some actions are sensitive and in many cases require express authority in the document to be valid or to be accepted by third parties:

• Making large gifts: most banks and many courts expect the POA to expressly authorize gifting if the agent should be able to make gifts or transfer assets to others (including the agent).
• Creating, modifying, or revoking trusts: a power to create or change trusts should be stated expressly if you want the agent to be able to do so.
• Changing beneficiary designations: removing or changing beneficiaries on life insurance or retirement accounts may require specific language or separate beneficiary designation forms; not all custodians accept a POA for this purpose.
• Transferring property to the agent: actions that benefit the agent personally are scrutinized and typically require clear, express permission and careful documentation.
• Make or revoke a will: an agent cannot make or change the principal’s will; wills must be executed by the principal while competent under Texas law.

Durability and when the agent’s authority takes effect

To ensure the agent can act when you lose capacity, your POA should contain durable language (words saying the authority continues despite your later disability or incapacity). Without durable language, a POA may end if you become incapacitated. You can also draft a “springing” power of attorney that becomes effective only upon a specified event (for example, a physician’s determination of incapacity), but springing POAs sometimes create delays because banks and others may require proof of incapacity before accepting the agent’s actions.

Agent duties and legal checks

When acting, an agent owes duties to the principal: act in the principal’s best interests, keep accurate records, avoid conflicts of interest, and cooperate with reasonable requests. If an agent misuses the POA or acts in bad faith, the principal (or others) may pursue civil claims, and criminal liability may apply in cases of theft or fraud. The Texas Estates Code addresses agent duties and remedies—see Chapter 751 for statutory guidance and forms.

What happens if there’s no POA or the agent can’t act?

If you do not have a durable POA and you become incapacitated, a court may appoint a guardian to manage your financial affairs. Guardianship is a court‑supervised process that can be more expensive, public, and inflexible than planning with a POA. For this reason, many people create a durable financial POA as part of basic incapacity planning.

Helpful Hints

• Choose an agent you trust. Consider a family member, close friend, or a professional fiduciary and name a successor agent.
• Be specific in the document. If you want the agent to do particular things (make gifts, manage a business, handle real estate), say so expressly.
• Include durable language so the POA remains effective if you become incapacitated. Ask an attorney how to word a springing POA if you prefer delayed effectiveness.
• Sign and notarize the POA. Texas typically requires acknowledgment before a notary public for the document to be accepted; real estate transfers often require recording.
• Talk to banks, brokers, and retirement plan custodians before relying on the POA. Some institutions require their own forms or additional documentation.
• Keep multiple certified copies. Provide copies to your agent, successor agent, and trusted advisors; store the original in a safe, accessible place.
• Instruct your agent to keep detailed records and receipts of transactions and to provide regular accountings if asked.
• Review and update the POA periodically, especially after major life events (marriage, divorce, a move, death of a named agent, changes in assets).
• Consider combining a financial POA with other documents: health care directives, HIPAA authorizations, and a beneficiary review for coordinated planning.
• If you expect complicated needs (business interests, large gifts, tax planning), consult a Texas estate planning attorney to draft tailored language and to avoid unintended consequences.

Key resource: read the Texas Estates Code, Chapter 751 for statutory rules and the official statutory forms: https://statutes.capitol.texas.gov/Docs/ES/htm/ES.751.htm.