Texas Powers of Attorney Lawyer
Powers of Attorney and Other Documents
There are different types of powers of attorney that accomplish different objectives. Anytime that someone is looking at their estate plan, they should consider the creation of powers of attorney to appoint someone to act for them in the event of their incapacity. In Texas, powers of attorney are created for both medical and financial concerns, and they are very important should something happen that requires someone to step in and make decisions for you.
Following is a brief discussion of the most commonly used powers of attorney, as well as other documents that are helpful in estate planning.
Statutory Durable Power of Attorney
The Statutory Durable Power of Attorney allows you to designate someone to make financial decisions in the event that you are unable to do so for yourself. The Durable Power of Attorney is a form created by the Texas Legislature and can be effective immediately, or at some time in the future. However, it ceases to be effective upon your death. The Statutory Durable Power of Attorney is far reaching and covers all areas related to the management of your financial affairs. It can be limited if you so wish. The granting of a Power of Attorney to another (your “agent”) must be done after careful consideration, as the person you designate will have significant powers. The person you designate should be someone in which you have complete trust and feel can exercise his power with complete and careful discretion.
There is a caveat to a Statutory Durable Power of Attorney, and that is it will not be accepted by all individuals or entities. Sometimes the document is readily accepted and sometimes not.
Social service agencies are more likely to accept it. If you are the child of a Medicaid applicant with a power of attorney from your parent, the agency will probably more readily acknowledge the powers granted to the agent. One of the reasons for this liberal attitude is that you are trying to get money for the elder, not from the elder. Society is not going to leave needy elders homeless, because of the form of the document or some defect in the language of a power of attorney.
A Power of Attorney is an Invitation:
One lawyer aptly put it:
“A power of attorney is really an invitation” to agencies, banks, and brokerages to accept the agent (person appointed) as authorized to handle the assets of the principal (person executing the power of attorney). Some institutions accept the invitation. Others will not. Government agencies are inclined to accept the invitation; banks accept it now and then; and brokerages most often decline. A way of looking at it is that neither the principal nor the agent can force a bank or anyone else to accept the power of attorney. The principal agreed that the agent can act for him when he signed the document, but that is only half the equation. Only when the bank or other third party agrees to honor the principal’s wishes does the power of attorney become truly effective. A factor that can play into the acceptance or rejection of the document is the age of the power of attorney. It is probably wise advice to execute a power of attorney about every two years.
Sometimes banks, and especially stock brokers, transfer agents, those handling mutual funds, retirement accounts, bonds, etc. And others in the financial world often refuse to recognize a power of attorney unless it is on their standard form or signed in their offices. Oftentimes these institutions want to see letters of guardianship. Letters of Guardianship grant a guardian broad powers and the institutions feel more comfortable dealing with guardians. See the guardianship section of this website for further discussion of guardianships.
So what does this mean to someone planning for disability or worried about the impending disability of a parent? The short answer is that one cannot always put absolute reliance on a power of attorney. Planning for disability and death requires a plan, not a document. The power of attorney can be helpful and can be part of a plan, but not a substitute for it. To truly give another power to manage your financial affairs the execution of a trust can give a trustee substantial powers that a power of attorney will not provide. See a further discussion of trusts in the trust section of this website.
Health Care Power of Attorney
The Health Care Power of Attorney, also called a Medical Power of Attorney allows you to designate a family member or friend to make medical decisions for you in the event that you are not able to do so. The person you designate to make these decisions is known as the “agent,” and the agent has broad authority to make medical decisions, unless you specifically restrict his authority. It is important to choose a person in whom you have absolute trust because the authority granted by the power of attorney is great.
A HIPAA Waiver is signed in conjunction with a Health Care Power of Attorney. HIPAA is an acronym for Health Insurance Portability and Accountability Act of 1996 (HIPAA). Basically the HIPAA Waiver addresses the use and disclosure of a patient’s health information. The HIPAA privacy rules help protect hospitals and doctors from liability when disclosing certain information regarding a patient. The rule strikes a balance that permits important uses of information, while protecting the privacy of people who seek care and healing. The HIPAA Waiver allows individuals (those persons designated as medical agents) access to your medical information so informed decisions can be made regarding your medical treatment and care.
Directive to Physician (living will)
Your physician can be granted the power to make decisions in situations in which you are suffering from a Terminal Illness or an Irreversible Condition.
If, in the judgment of your physician, you are suffering with a “Terminal Condition” from which you are expected to die within six months, even with available life-sustaining treatment provided in accordance with prevailing standards of medical care, you can request that all treatments other than those needed to keep you comfortable be discontinued or withheld and your physician allow you to die as gently as possible.
Typically, I advise clients with modest estates to execute a Statutory Durable Power of Attorney, Medical Power of Attorney, HIPAA Authorization and Directive to Physician (also known as an Advance Directive or living will), and a Designation of Guardian (see guardianship section of this website) along with a Will as a good basic estate plan that will address basic issues everyone faces.
Still, a trust based plan avoids a guardianship proceeding; and eventually a probate proceeding to the extent property is in the trust. See the trust section of this website for more discussion of trusts and their advantages.