The Durable Power of Attorney That Goes With a Living Trust

Quick answer: A living trust only manages the property that is in the trust. A durable power of attorney is what lets someone handle everything else if you become incapacitated, such as an account you never retitled or a tax matter. In Texas it has to be in writing or another record, signed, and acknowledged before an officer such as a notary, and it must say that it survives your incapacity (Estates Code Sec. 751.0021). It ends when you die (Sec. 751.131). Healthcare is separate: a medical power of attorney covers those decisions (Health & Safety Code Sec. 166.152). A Houston family’s plan usually needs all of them.

Why doesn’t a living trust cover everything?

A living trust is powerful for what it holds. Your successor trustee can manage the house and the accounts you moved in. It has no reach over anything else. Very few people get every last asset into the trust, and a new account opened years later usually stays out.

A trust also says nothing about who can talk to your doctors. That is why a trust alone leaves gaps, and why a will or a trust is rarely the whole plan.

What makes a power of attorney “durable” in Texas?

Under Sec. 751.0021, an instrument is a durable power of attorney if it:

1. Is a writing or other record that designates another person as agent and grants authority to act in your place.
2. Is signed by you as an adult principal, or in your conscious presence by another adult you direct to sign your name.
3. Contains the words “This power of attorney is not affected by subsequent disability or incapacity of the principal,” or “This power of attorney becomes effective on the disability or incapacity of the principal,” or similar words that clearly show the agent’s authority continues despite your incapacity.
4. Is acknowledged by you, or by the adult you directed, before an officer authorized to take acknowledgments to deeds of conveyance and administer oaths.

The third item does the real work. Without language like that, you may have a power of attorney, but not one that was written for the situation you are planning for.

When does the agent’s authority begin?

That depends on which words you choose. One version works from signing. The other becomes effective on your disability or incapacity.

If the power of attorney springs into effect on incapacity, you will want to know how that gets decided. Unless the document defines it differently, Sec. 751.00201 says you are considered disabled or incapacitated if a physician certifies in writing, at a date later than the date the power of attorney was executed, that based on the physician’s medical examination you are mentally incapable of managing your financial affairs.

What can’t the agent do without express permission?

A general grant goes a long way, but Sec. 751.031(b) holds some actions back. An agent can do these only if the document expressly grants the authority:

• create, amend, revoke or terminate an inter vivos trust;
• make a gift;
• create or change rights of survivorship;
• create or change a beneficiary designation; or
• delegate authority granted under the power of attorney.

The first item matters most here. If you want your agent to be able to work with your trust, the document has to say so. A form downloaded years ago may not. There is also a hard limit: a transfer on death deed may not be created through a power of attorney at all (Sec. 114.054).

What about real estate?

A durable power of attorney used for a real property transaction that requires a recorded instrument, such as a deed of conveyance, deed of trust or lien, must be recorded with the county clerk where the property is located, not later than the 30th day after the instrument is filed for recording (Sec. 751.151). If your agent may need to sell or refinance the house, that is a practical step to know about. It is the kind of detail that overlaps with real estate law.

How is a medical power of attorney different?

It is a separate document under a separate code. Under Health & Safety Code Sec. 166.152, your agent may make any health care decision on your behalf that you could make if you were competent, subject to any express limits you write in.

Three things to know about it:

• It waits for a doctor. Your agent may act only if your attending physician certifies in writing, and files in your medical record, that you are incompetent.
• Your objection counts. Treatment may not be given to or withheld from you if you object, regardless of whether a medical power of attorney is in effect or whether you are competent.
• Your doctor keeps talking to you. The attending physician must make reasonable efforts to inform you of proposed treatment, or a proposal to withdraw or withhold treatment, before carrying out your agent’s directive.

How do these documents fit together?

Document	What it covers	When it works
Living trust	Property moved into the trust	Once signed and funded; continues after death
Durable power of attorney	Your financial affairs outside the trust	While you are alive; ends at death
Medical power of attorney	Health care decisions	Once your attending physician certifies incompetence
Will	What you own at death and did not otherwise place	At death, after admission to probate

Each one covers a gap the others leave open. That is what people mean by an estate plan.

Who should you choose?

Often the same person serves as agent and successor trustee, and sometimes it makes more sense to split the jobs. Pick someone who can keep records and act under pressure. Your choices are not locked in. While the trust is revocable you can change it in writing, and a principal can revoke a durable power of attorney too (Sec. 751.131).

Why work with Gordon Law & Associates on your documents

Attorney Pamela Y. Gordon’s practice focuses on real estate law, complex title issues, and estate planning with an emphasis on trusts. Her aim is documents that work together as a plan rather than a stack of separate forms.

Call (713) 837-7875 for a free consultation, in English or Spanish, or contact the firm.