Financial and Medical Powers of Attorney
A power of attorney is a document that grants a specific individual the ability to make decisions for you if you become incapacitated through accident or illness and can't make those decisions for yourself. The person who makes a power of attorney is called the principal, while the person who is given the power is called the agent. Powers of attorney are an important tool in estate planning and asset protection, to make sure that your wishes regarding financial management or medical treatment are carried out if you are no longer able to express them. Remember that if something happens and you can no longer manage your own affairs, someone will still have to pay your bills and taxes, deposit any income, and give guidance to medical personnel about your treatment. If you have not designated an agent to manage these matters, the court may be forced to appoint a guardian for you. At that point, you will not be able to have a say in who should be appointed or how you want them to act on your behalf.
Many people mistakenly assume that if they have signed a power of attorney, that is sufficient for all circumstances. But all powers of attorney are not the same. While you may grant a power of attorney for a variety of reasons, there are two types generally used in estate planning: the statutory durable power of attorney, that pertains to financial decisions, and the medical power of attorney, that pertains to medical decisions. It is important to have both types, because a power that grants the authority to make financial decisions does not confer the authority to make medical decisions, and vice versa.The Statutory Durable Power of Attorney
There may be a variety of reasons to use a power of attorney. For example, you may wish to grant someone the authority to sell property on your behalf. A power of attorney can be revoked at any time, or it can include a specific end date. The statutory durable power of attorney (DPOA), as its name indicates, follows a form prescribed by the Texas Probate Code. It is referred to as "durable" because it does not end if you become incapacitated (although you make revoke or amend it as you choose before incapacity). This type of power allows your designated agent to make financial, business, and legal decisions for you as you specify. The state form lists a great variety of powers that you may choose to grant. It's important to confer with an attorney about how these powers might apply to your personal circumstances and which you may wish to grant or withhold.
Recent updates to Texas law regarding these DPOAs have made some important changes enhancing their usefulness. In the past, an agent's ability to act under a DPOA was sometimes limited by businesses' reluctance to accept that DPOA. Amongst many other changes, the new law limits a third party's ability to reject a DPOA to certain specified grounds for refusal. If you already have a DPOA in place, you may wish to consult with an attorney to determine whether changes are necessary in light of the new rules.The Medical Power of Attorney
A medical power of attorney (MPOA) allows your designated agent to make health care decisions for you. It does not confer any authority with respect to financial or business decisions. While the power becomes effective when it is signed, your agent may not make decisions for you until a doctor certifies in writing that you are incompetent to make such decisions yourself. When you choose someone to act as your agent for medical purposes, you should be confident that they understand your wishes and comfortable with them making potentially life and death decisions for you. This may not be the same person whom you wish to act as your agent for financial decisions.
As with the DPOA above, the state of Texas has a statutory form that must be followed, and a new law has made some changes to that form. So if you already have an existing MPOA, you may want to revisit it with an attorney in light of the statutory changes.Consult a Texas Estate Planning Attorney
End of life issues are difficult for anyone to discuss. But failing to have that discussion can make things worse. Even if you already have an estate plan in place, new changes to the law effective at the end of 2017 and beginning of 2018 make it necessary for you to revisit that plan to confirm that it still accomplishes your goals. I can help you to have all of the necessary documentation in place to make the legal pathway as smooth as possible for you and your loved ones in difficult times. Call me at (903) 944-7537 today.