Life is full of surprises, and preparing for the worst is an essential element of estate planning. If you become physically or mentally incapacitated in some way, you want to know that someone you trust can make critical decisions on your behalf. Drafting a power of attorney and designating someone as your agent helps protect your estate, makes disagreements among your family less likely if you’re incapacitated, and provides you with peace of mind.
The estate planning lawyers in Austin at Smith Family Law can help you draft a power of attorney and protect your estate if something happens to you. Family law and estate planning cases are all we do at our firm, and that tight focus helps us find the right solution for your needs. We’ve seen how poor estate planning causes chaos; we can help you avoid these legal headaches. Call us today at (512) 714-2877 or fill out our contact form for your free consultation.
What Is a Power of Attorney?
A power of attorney is a legal document that grants authority to an individual (referred to as the “agent” or “attorney-in-fact”) to make decisions on behalf of another person (known as the “principal”) in various matters. Depending on their needs and preferences, the principal can delegate specific powers or grant broad authority to the agent. The power of attorney document outlines the scope and limitations of the agent’s powers. It can grant temporary or durable authority, lasting even if the principal becomes incapacitated.
Why Do You Need a Power of Attorney?
People often ask us why they need a power of attorney, especially if they have already created a will or other estate planning documents. But a power of attorney serves a different purpose than a will or advanced directive for healthcare. Some reasons why you need a power of attorney as part of your estate plan include:
- Incapacity: If incapacitated by illness, injury, or age, a power of attorney is crucial. By appointing an agent early, you ensure a trusted person makes decisions for you when necessary.
- Convenience and Assistance: Even in situations where you are not incapacitated, you might choose to grant a power of attorney to someone so they can handle certain matters on your behalf. This can be helpful when you’re traveling, unavailable to meet with a power of attorney lawyer, or simply want assistance managing your affairs.
- Business or Financial Management: A power of attorney can authorize someone to handle specific financial transactions or manage your business interests. For example, if you cannot attend a real estate closing, you can grant your agent a limited power of attorney to sign the necessary documents on your behalf.
- Healthcare Decision Making: A healthcare power of attorney allows you to appoint someone to make medical decisions on your behalf if you are unable to do so. This is especially important when your wishes regarding medical treatment or end-of-life care need to be honored.
- Military Deployment: Members of the military often create Powers of Attorney before deployment to grant someone the authority to handle their legal and financial matters while they are away.
Different Types of Powers of Attorney
One of the benefits of creating a power of attorney is that different types are available depending on your needs. Here are some examples of the most common types of powers of attorney:
- General power of attorney: This grants broad authority to the agent to handle various financial and legal matters on behalf of the principal. It typically includes powers such as managing bank accounts, signing contracts, paying bills, buying or selling property, and handling investments. A general power of attorney is useful when the principal is absent or wants assistance managing their affairs.
- Limited or special power of attorney: A special or limited power of attorney grants the agent specific powers for a particular purpose or transaction. The powers are limited to the scope outlined in the document. For instance, someone might give limited power of attorney to sell their property or manage a specific legal issue. The power of attorney becomes invalid once the specific purpose is fulfilled.
- Durable power of attorney: A durable power of attorney remains in effect even if the principal becomes incapacitated or unable to make decisions. It allows the agent to continue acting on behalf of the principal, managing their financial and legal affairs. Many people use a durable power of attorney to let a trusted person make decisions during their incapacity.
- Springing power of attorney: A springing power of attorney becomes effective only when a specific event or condition occurs. For example, it may specify that the agent’s authority comes into effect when a doctor certifies that the principal is incapacitated. The purpose of a springing power of attorney is to ensure that the agent’s powers are activated only when necessary.
- Healthcare power of attorney: This power of attorney lets an agent make medical decisions if the principal can’t. The agent’s powers typically include decisions related to medical treatment, healthcare providers, and end-of-life care. A healthcare power of attorney ensures that the principal’s healthcare preferences are respected.
Texas Requirements to Draft a Power of Attorney
The requirements to create a valid power of attorney in Texas are seemingly straightforward, but we strongly recommend you work with an experienced lawyer to avoid any issues. If you don’t precisely follow the requirements to create a power of attorney, the document is invalid, and you won’t have anyone to manage your affairs if you become incapacitated.
With that out of the way, the requirements to draft a power of attorney in Texas are:
- You must be at least 18 years old when you sign the agreement.
- You must know what you’re doing and be of sound mind when you sign the agreement.
- You must sign the document in the presence of a public notary.
- If your power of attorney includes terms allowing your agent to make real estate decisions on your behalf, you must file the document with the clerk of any county where you own property.
How to Choose an Agent for Your Power of Attorney
Your chosen agent has significant influence over your life and your estate. Therefore, it’s crucial to think carefully about who you want to serve in this capacity. Here are a few factors to keep in mind when choosing an agent:
- Trustworthiness: Selecting an agent who is trustworthy and reliable is essential. This person will receive significant authority to act on your behalf and make decisions that can significantly impact your life. Choose someone who has your best interests at heart, understands your values and wishes, and can responsibly manage your affairs.
- Competence and Availability: Consider the agent’s ability to handle the specific tasks involved in managing your affairs. Assess their knowledge, organizational skills, financial acumen, and legal understanding. Additionally, ensure that the chosen agent is available and willing to accept the responsibilities associated with the power of attorney.
- Communication and Understanding: Effective communication is essential between you and your agent. The agent should understand your preferences, values, and expectations regarding your financial, legal, and healthcare matters. You and your agent must clearly understand each other’s roles and responsibilities.
- Compatibility: Consider the agent’s compatibility with your decision-making style and personal beliefs. Choose someone who shares your values and will respect your wishes. If you have specific instructions or preferences, ensure the agent will honor and act upon them.
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How Our Austin Estate Planning Lawyers Can Help
Because there are specific requirements for a power of attorney to be valid and your chosen agent has significant authority to manage your affairs, you need help from a lawyer who understands these complex documents. Our power of attorney lawyers in Austin can help you with your power of attorney by:
- Taking Care of the Legal Documentation: A lawyer can draft a clear, precise power of attorney, preventing ambiguity. They can include all necessary provisions and language to ensure the document’s enforceability and effectiveness. Professionally drafting a power of attorney can prevent potential legal disputes or challenges down the line.
- Handling Legal Formalities: Powers of attorney often require specific formalities to be valid, such as witnessing or notarization. A skilled power of attorney lawyer ensures your document is legally valid and properly enforceable.
- Protecting You Against Abuse: A lawyer can explain risks and safeguards when granting someone authority over your affairs. They can advise you on choosing a trustworthy agent and include provisions in the document to protect against abuse or misuse of the powers granted.
- Integrating Your Power of Attorney with Other Estate Planning Documents: Estate planning involves various legal documents, such as wills, trusts, and advanced healthcare directives. A lawyer can help ensure that your power of attorney works harmoniously with these documents, addressing potential overlaps or conflicts.
- Updating and Reviewing: Over time, your circumstances and preferences may change, requiring updates to your power of attorney. An estate planning lawyer can update your power of attorney to match your current situation.
Contact Our Office for Help Drafting a Power of Attorney
A valid and enforceable power of attorney is a crucial component of any estate plan. The power of attorney lawyers in Texas at Smith Family Law have the knowledge, experience, and dedication to help you develop a plan that meets your needs. Call (512) 714-2877 or reach out online for a free case review.