As we age, it’s crucial to plan for the future. If you’re a Texan over 55, you might be wondering if you really need powers of attorney or how they fit into your estate planning. But the truth is, we should be thinking about Powers of Attorney as soon as we turn 18!
What is a Power of Attorney?
A power of attorney (POA) is a legal document that allows you to choose someone to make decisions for you. This person, called your “agent,” can handle your finances, property, or healthcare if you can’t do it yourself. This can be anyone that you choose. While usually a family member it’s not uncommon for someone to name a very close friend that they trust and maybe even consider family.
What are the Powers of Attorney types used in Texas?
Power of attorney types commonly used:
- General Power of Attorney: This gives broad powers to your agent but ends if you become incapacitated.
- Springing Power of Attorney: This gives your agent the authority to act on your behalf only when you become incapacitated.
- Durable Power of Attorney: According to §Texas Estate Code 751.0021 this POA stays in effect even if you become incapacitated. It’s a powerful tool for managing your affairs long term and what we typically recommend to our clients.
- Medical Power of Attorney: This lets your agent make healthcare decisions for you if you can’t communicate your wishes.
- Limited Power of Attorney: This restricts your agent’s powers to specific tasks or time period.
Why do you need a Power of Attorney?
Think of a POA as insurance for your decision-making. It ensures someone you trust can:
- Pay your bills and manage your money
- Make healthcare choices based on your values
- Handle your property and investments
- Make decisions about your business
Without a POA, your family might need to go to court to get permission to help you. Or you may have to get those permissions for you to help your adult children! Once your kids turn 18, you no longer have the ability to act on their behalf in most cases. You cannot predict the future, but you can and should have protections in place for these types of situations or emergencies.
How to set up Powers of Attorney
Creating a POA isn’t complicated, but it’s important to do it right. Here are the steps:
- Choose your agent carefully. Pick someone you trust completely.
- Decide what powers you want to give them.
- Meet with an attorney that specializes in estate planning and can help you decide which POAs are right for your needs and wishes.
- Give copies to your agent, your doctor, and other important people in your life. Keep the original documents in a safe place.
- If you entrust your agent to conduct real estate transactions for you, the power of attorney document must be filed with the clerk of each county where the property is located.
When do Powers of Attorney stop working?
Remember, you can change or cancel your POA at any time as long as you’re mentally capable. To revoke a power of attorney, you must notify your agent and anyone that your agent may be working with on your behalf. Click here if you need forms to help you revoke your power of attorney.
It’s also important to know that POAs stop working when you pass away. Let me repeat that, when you pass away, any Powers of Attorney you had prepared will no longer work. Just like a will does not work before you pass. That’s why for our clients we make sure that POAs are included in any Trust or Will that we prepare.
If you’d like to learn more about how these documents work together, have your estate planning questions answered by an attorney, and are in the Austin or Woodville areas, we’d like to invite you to one of our free attorney taught Estate Planning Seminars. Click here to see when and where the next one is near you.
DISCLAIMER: This article is for educational and informational purposes only. The content does not constitute legal advice and does not create an attorney-client relationship. Consult a licensed attorney in your State for advice regarding your specific situation.
