A power of attorney is a commonly used legal document, often included in a comprehensive estate plan. When used properly, a power of attorney, or POA, can be a beneficial addition to your estate plan. Unfortunately, people often execute a POA without a full understanding of the power conferred on an Agent. For example, under a power of attorney can an Agent make gifts on your behalf? The odds are good that you do not know the answer to that question – but you should before you execute a POA.
A power of attorney is a legal arrangement by which you grant someone (your Agent) the legal authority to act on your behalf in legal matters. If you execute a “limited” or “special” POA your Agent will only have those specific powers enumerated in the POA agreement. If, however, you execute a general POA your Agent will have broad powers to act on your behalf. Your Agent may do things such as withdraw funds from your bank account or even sell property of yours. One thing your Agent cannot do, however, is make gifts on your behalf unless you specifically include that power in the power of attorney document.
In Texas, a general POA does have limitations by law. One of those is that the Agent cannot makes gifts on behalf of the Principal (you) unless that authority is specifically designated in the POA agreement. Even then, the Agent’s authority to make gifts may be limited by the wording in the POA agreement.
The reason for this limitation is simple. Making gifts of the Principal’s property is not beneficial to the Principal. Therefore, if you want your Agent to have that authority you need to specifically grant that authority. Moreover, if your Agent plans to use the POA in another state, or you plan to execute a POA agreement from another state, you need to find out what the law is in that state with regard to making gifts with a power of attorney. In some states an Agent can never make gifts, even if the POA agreement specifically allows the Agent to do so.
If you have additional questions or concerns about a power of attorney, or your Texas estate plan in general, contact the experienced Texas estate planning attorneys at The Mendel Law Firm, L.P. by calling 281-759-3213 to schedule your appointment today.
Latest posts by Stephen A. Mendel, Estate Planning Attorney (see all)
- Famous Estates-Champ or Chump? Paul Newman - July 19, 2019
- Do I Need to Include Retirement Planning in My Estate Plan? - July 15, 2019
- Texas Trivia- Who played the lone survivor of the Alamo in “The Man from the Alamo?” - July 12, 2019