- Estate Planning
- Elder Law
- Special Needs Trusts
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There are two main types of Powers of Attorney:
Both documents are only in effect while an individual is living.
The Statutory Durable Power of Attorney, or Financial Power of Attorney, allows an individual’s agent to manage his or her income and assets on his or her behalf. This can include:
There are several options when executing a Statutory Durable Power of Attorney. First, a person can choose whether the Statutory Durable Power of Attorney becomes effective immediately upon signing the document or only upon incapacity. Second, a person can limit the time frame of the agent’s power as well as the specific powers granted to the agent. Third, a person can name more than one agent to serve at a time and decide whether all the agents must make joint decisions or whether they can act independently of each other.
The agent under a Statutory Durable Power of Attorney is held to a higher fiduciary standard than a lay person. Therefore, it is imperative to choose an individual who is trustworthy and willing to step up to take action when necessary. Unlike with making medical decisions, there is not a statutory default for who is able to take care of finances if the individual is incapacitated. If a person becomes incapacitated and does not have a Statutory Durable Power of Attorney in place, the only way his or her family can manage his or her financial assets is by obtaining a Guardianship of the individual’s Estate, which is a much more involved, complicated, and expensive process.
The agent under the Medical Power of Attorney is someone an individual appoints to make medical decisions for him or her when the individual is unable to make decisions for him- or herself. Unlike the Statutory Durable Power of Attorney, the Medical Power of Attorney only goes into effect when the individual becomes incapacitated. The Medical Power of Attorney is another chance for a person to take control over his or her own decisions and to go outside of the statutory defaults under Texas law. If a person becomes incapacitated without a Medical Power of Attorney, hospitals and doctors will follow the order of “next of kin” under the Texas Health and Safety Code. However, with a Medical Power of Attorney, a person can decide who will make his or her medical decisions and in what order they will serve when executing a Medical Power of Attorney. There is also the option to have more than one agent serving at a time as well as the option to dictate whether the agents must make joint decisions or if they may act independently.
Powers of Attorney are a key part of any estate plan. Contact us, and our Attorneys will help you develop your estate plan.