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Power of Attorney Texas: The Importance of Providing for Incapacity In Your Estate Plan

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This article about Texas power of attorney documents by estate planning attorney Joy McNair and the McNair Law Group, PLLC is not intended to be and should not be construed as legal advice. For advice specific to your situation, contact us today.


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What Is A Texas Power of Attorney, And Why Do I Need One?

A power of attorney document (POA) is a legal instrument that gives authority to someone you designate, typically referred to as an "agent" or "attorney-in-fact," to act on your behalf in specific ways.

While these documents are most commonly used in the event that you fall ill or have an unexpected accident and cannot act on your own behalf, they can also be used in situations where you can't be present to conduct business for yourself.

The scope of the agent's delegated authority can vary greatly from one POA to another.

For instance, Texas power of attorney documents can be used for broad range of specific purposes such as selling or purchasing property, making gifts to family members, or managing finances while you are out of town. They can also be general and authorize an agent to do almost anything you could do yourself.

Avoid Probate During Your Life: Guardianships

The need for a guardianship – the process whereby someone is appointed by a court to assume responsibility for the financial institutions, the property, or the personal welfare of an adult – and keeping your family out of Court can be accomplished by making plans for incapacity in your estate plan.

The most common ways to avoid the need for expensive and burdensome guardianship proceedings through effective estate planning with powers of attorney include:

Durable Financial Power of Attorney – Executing a financial durable power of attorney enables you to name an individual to act as an agent if you become incapacitated. The agent is empowered to handle all your financial and business affairs if you cannot do so yourself. You can decide if the powers become active immediately (immediate power), or only if and when you become incapacitated (springing power). Either way, the power of attorney document must be executed before any incapacitation.

Medical Power of Attorney – Executing a Medical Power of Attorney designates someone to serve as your agent for making health care decisions in the event of incapacity. This can include temporary hospitalizations or other day-to-day care, and your choice should be someone you trust to honor your wishes regarding your medical care. This document must also be executed before any incapacitation.

Directive to Physicians (aka Living Will) – A Directive to Physicians (also known as Living Will), provides your instructions to medical professionals in the event of a life-threatening emergency and you are unable to communicate your wishes. It is effective if you have a terminal or irreversible illness and addresses treatments such as life support, blood transfusions, artificial nutrition and hydration and other life-sustaining treatments. This document takes that pressure off your loved ones from making a difficult decision and must be signed before any incapacitation.

Revocable Living Trust – Executing a revocable living trust avoids the need for conservatorship proceedings by designating a successor trustee to serve during a period of incapacity. You can serve as sole trustee or co-trustee along with a trusted person or financial institution of your choice. If you become incapacitated, the co-trustee or successor trustee you have designated will take over the management of your assets held in the trust.

Remember, though, this is only effective if your property is properly titled in the name of your Living Trust.

To learn more about life & legacy planning, call our office at (281) 407-9830.

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What types of powers of attorney are available in Texas?

1) General Power of Attorney:

A general power of attorney gives someone else the authority to act on your behalf in various legal and financial matters. This type of legal power of attorney is often used when you need someone to handle your affairs temporarily while traveling or recovering from an illness. A general power of attorney will typically end if you become mentally or physically disabled or incapacitated.

2) Durable Power of Attorney:

A durable power of attorney is similar to a general power of attorney, but it remains in effect even if you become incapacitated or unable to make decisions for yourself. A durable power of attorney can be set up to give someone else the authority to handle your finances, make medical decisions, or both.

3) Limited (or Special) Power of Attorney:

This power of attorney grants the agent limited powers for specific transactions for limited period or periods. For instance, it can be for selling a property or managing a particular business matter.

4) Medical Power of Attorney:

A medical power of attorney is a legal document that gives someone else the authority to make medical decisions on your behalf if you become incapacitated or unable to do so yourself. This type of power of attorney is also sometimes called a healthcare proxy.

In Texas, a medical power of attorney must be signed in the presence of a notary or two witnesses.

5) Financial Power of Attorney:

A financial power of attorney gives someone else the authority to make financial decisions on your behalf if you become incapacitated or unable to do so yourself. A financial power of attorney allows your other agent authority to handle your finances, pay your bills, and manage your investments. In Texas, a financial power of attorney must be signed in the presence of a notary.

In Texas, there are various powers of attorney that individuals can execute to appoint someone to act on their behalf. These powers are categorized based on the powers granted to the agent.

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What are the legal requirements for a financial power of attorney in Texas?

In Texas, a financial power of attorney must be in writing, signed by the principal, and acknowledged before a notary public. Additionally, the document must specify the powers granted to the agent and whether the power of attorney is durable.

If you become incapacitated and your agent needs to use a power of attorney, the document must be presented to the financial institution or other entity that needs to verify the agent's authority.

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Who Needs a Financial Power of Attorney in Texas?

Anyone can benefit from having a financial power of attorney, but it is especially important for older adults and those with chronic illnesses.

A financial power of attorney allows someone else to step in and manage your finances if you cannot do so yourself. This can be a great relief to your loved ones, as it ensures that your bills will be paid and your finances will be managed how you want them to be.

Everyone over 50 needs a financial power of attorney document in Texas, especially those vulnerable to incapacitation or emergencies. A financial power of attorney is commonly used in the following situations:

  • Serious illness or injury

  • Mental incapacity

  • Extended travel abroad

  • Military deployment

  • Aging or mobility issues

Anyone over the age of 18 can and should create a financial power of attorney. However, they are particularly important for aging individuals who may be facing a medical condition or want to ensure their finances are properly managed even if they cannot do so themselves.

Having a financial power of attorney can offer peace of mind and help avoid confusion and disputes in the future.

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Choosing an Agent for Your Financial Power of Attorney

Choosing an agent for any power of attorney is crucial. The agent must be trustworthy, reliable, and have your best interests at heart.

Consider someone who is financially savvy, organized, and can manage your affairs efficiently. You can also select a family member, friend, or professional like an attorney or financial planner.

Remember that this individual will have access to personal information and will be able to make important decisions. Consider whether they have experience managing the issues they are entrusted to, and be sure to have an open and honest conversation about your expectations and wishes.

What is a Springing Power of Attorney?

In Texas, a medical power of attorney can be either "immediate" or "springing." An immediate power of attorney takes effect as soon as you sign it, while a springing power of attorney only takes effect when certain conditions are met, such as when a doctor declares that you cannot make your own medical decisions.

If you choose to create a springing power of attorney, it's important to ensure that the document clearly defines the conditions under which it will become effective.

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The Importance of Seeking Legal Advice

Creating a power of attorney, whether it’s a financial or medical, limited or special power only, is an important decision that should not be taken lightly. Seeking legal advice can help ensure that the document is properly drafted, meets legal requirements, and is in line with your wishes. In Texas, it is recommended that you consult with a qualified attorney to help create your power of attorney.

Creating a power of attorney is an important part of planning for the future. By understanding the different types of powers of attorney available in Texas, the legal requirements for creating a financial power of attorney, and who needs a financial power of attorney, you can make an informed decision for yourself and your loved ones.

By choosing a trusted agent and seeking legal advice, you can rest assured that your future plans are in good hands.

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