A power of attorney (POA) is a legal document that gives someone else—called an “agent”—the authority to make decisions on your behalf. These decisions can range from managing your finances to handling healthcare matters. A power of attorney ensures that someone you trust can act for you if you’re unavailable, too ill to handle your affairs, or unable to sign important documents. It is one legal document that comprises part of a comprehensive Tyler estate plan. It's also critical for young adults who are just turning 18 or are headed off to college so that parents and guardians can still help when needed in an emergency.
When planning for the future, understanding the legal tools at your disposal is crucial. Two such tools, often confused but distinctly different, are the medical and durable power of attorney. Both play vital roles in Tyler estate planning and personal care but serve different purposes.
A medical power of attorney is a legal document that allows you to appoint someone to make medical decisions on your behalf if you become incapacitated. This person, often called your health care agent, will have the authority to make healthcare decisions that align with your wishes and values.
When you create a medical power of attorney in a Tyler estate plan, you designate a trusted individual to make health care decisions for you. This person should be someone you trust, who understands your wishes and is willing to advocate on your behalf. It's essential to have open and honest conversations with the person you choose to ensure that they are comfortable and prepared for this responsibility.
A durable power of attorney is broader in scope and remains in effect even if you become incapacitated. This ensures continuity in managing your affairs during critical times. It allows you to appoint someone to make decisions on your behalf, not just for health care but also for financial and legal matters. This type of power of attorney remains in effect, even if you become mentally incapacitated.
The person you appoint in a durable power of attorney, often called an attorney-in-fact, will have the authority to manage your financial affairs. This can include paying bills, managing investments and even selling property. It's crucial to choose someone who is trustworthy and has some understanding of financial management.
Without a power of attorney, your family could face significant challenges if you become incapacitated. A Texas probate court may appoint a conservator or guardian to make decisions for you, but this process can be time-consuming, expensive, and stressful. Additionally, you won’t have control over who the court appoints, and there’s no guarantee that person will act according to your wishes.
For comprehensive Tyler estate planning, many individuals use a durable power of attorney alongside a revocable living trust. A revocable trust allows you to retain control over your assets while you are capable and names a successor trustee to manage the trust’s assets if you become incapacitated or pass away.
However, it’s important to note that a successor trustee only manages assets held within the trust. For this reason, assets must be retitled into the trust to ensure they’re included.
Failing to create a power of attorney or revocable trust can result in your family needing to seek legal guardianship if you become incapacitated. Guardianship is a complex and costly process that involves court proceedings, annual financial reporting, and often the posting of a surety bond to protect your assets.
These burdens can easily be avoided by working with a skilled Tyler estate planning attorney to create a customized estate plan tailored to your needs.
Preparing for incapacity isn’t something to put off. By creating a power of attorney and other essential estate planning documents, you can protect yourself and your loved ones from unnecessary legal and financial challenges.
Book a consultation with Tyler Estate Planning Attorney Bradley S. Campbell to discuss how to protect yourself and prepare for the unexpected, but possible event of incapacity with a comprehensive estate plan that includes a power of attorney.
Reference: Nerd Wallet (May 10, 2023) “What is a Power of Attorney (POA)? Types, How, When to Use”
