What Powers of Attorney Cover and When They Take Effect
You may be perfectly capable of handling your own finances and health care decisions today. But if an illness, injury, or other circumstance temporarily or permanently prevents you from doing so, someone may need legal authority to act for you. A power of attorney lets you decide in advance who that person will be and what they will be allowed to do.
At Tefera Law Firm, PLLC, we help clients in Colleyville, Texas, prepare powers of attorney as part of their estate planning. Choosing someone who may eventually manage important matters for you requires considerable trust, so we help you understand the authority you are granting and when it can be used.
What Does a Financial Power of Attorney Cover?
A financial power of attorney allows you, as the principal, to authorize an agent to handle financial and property matters identified in the document. The authority can cover numerous areas or be limited according to your planning needs.
Texas's statutory durable power of attorney form covers categories involving real property, personal property, stocks and bonds, banking and other financial institutions, business operations, insurance, retirement plans, taxes, and certain benefits. The document determines which categories of authority you grant, and Texas law imposes additional requirements on certain actions.
This gives you an opportunity to consider what you actually want another person to be able to do. Someone who needs assistance with particular financial matters may have different planning needs from someone primarily preparing for possible future incapacity.
When Does a Durable Power of Attorney Take Effect?
A Texas durable power of attorney can generally be structured to become effective immediately or upon a future event or contingency identified in the document. If effectiveness depends on your incapacity, Texas law provides procedures for determining when that condition has occurred.
Choosing between immediate and later authority has practical consequences. If authority begins immediately, your agent can exercise the powers you granted even though you remain capable of managing your own affairs. That may be useful when you intentionally want someone to assist you, but it also makes choosing a trustworthy agent particularly important.
If the document instead makes authority contingent on incapacity or another future event, the required condition must occur before the agent can act.
The better choice therefore depends on why you are creating the document. Thinking about when you would actually want assistance can help you decide which arrangement fits your circumstances.
Medical Powers of Attorney Follow Different Rules
A Texas medical power of attorney serves a different purpose. Instead of managing financial or property matters, your agent makes health care decisions for you when you cannot make them yourself.
Your medical agent does not receive immediate decision-making authority merely because you signed the document. The agent may exercise authority when your attending physician certifies in writing and places in your medical record that you are incompetent to make health care decisions.
Once that authority is effective, the agent can generally make health care decisions you could make yourself, subject to your instructions and statutory limitations. The agent must follow known wishes, including relevant religious and moral beliefs, or make decisions based on your best interests if your wishes are unknown. Texas law also excludes certain decisions from an agent's authority.
That distinction can make planning less unsettling than it initially sounds. Creating a medical power of attorney does not mean immediately giving someone else control over your medical care. It prepares someone you choose to act if the legal conditions for that authority are later met.
Including financial and estate planning powers of attorney can therefore address different needs without treating financial and medical decision-making as interchangeable.
Choosing the Right Agent Matters
The usefulness of a power of attorney depends partly on the person you choose to exercise it. An agent handling financial matters may have access to significant property or accounts, while a medical agent could someday be asked to make consequential health care decisions.
Trust is essential, but it is not the only consideration. Think about whether the person understands your wishes, exercises sound judgment, can manage the responsibilities involved, and is likely to be available when needed.
It can also be useful to consider who should serve if your first choice cannot or will not act. Depending on the document, a successor agent can provide continuity without requiring your original choice to remain available indefinitely.
These decisions can feel unusually personal because you are planning for circumstances in which you may have to rely heavily on someone else. Talking with the person you intend to appoint can help both of you understand what the role may involve before that authority is ever needed.
Does a Power of Attorney Continue After Incapacity?
A properly executed durable power of attorney is designed so that your agent's authority is not terminated simply because you later become incapacitated. That durability is one of the document's central estate planning functions.
That does not mean every power of attorney is permanent. A durable power of attorney terminates under circumstances established by Texas law, including the principal's death or revocation of the document. It may also terminate according to its own terms or when its purpose has been accomplished.
An individual agent's authority can end separately. For example, unless the document states otherwise, a divorce or annulment can terminate your spouse's authority.
A document you signed years ago may therefore remain legally significant even when your relationships or planning goals have changed. Reviewing your powers of attorney after meaningful life changes can help you determine whether the people and authority identified in them still reflect what you want.
Powers of Attorney Lawyers in Colleyville, Texas
A power of attorney works best when it fits with the rest of your estate plan. Financial authority, medical decision-making, beneficiary arrangements, and other planning documents may need to work together if you become unable to manage your affairs.
At Tefera Law Firm, PLLC, we can help you decide which powers of attorney belong in your plan and prepare documents that reflect those decisions. Attorney Chrissy Tefera has been licensed since 2007 and is Board Certified in Family Law by the Texas Board of Legal Specialization, while Attorney Jessica Arreguin previously spent 15 years as a paralegal, including seven years focused on estate planning, probate, and family law.
We work with clients in Tarrant County, Colleyville, Keller, Grapevine, Southlake, Watauga, Hurst, Euless, Bedford, North Richland Hills, Fort Worth, Arlington, Dallas, and Denton. If you are creating or updating an estate plan, our Colleyville estate planning lawyers can help you determine how powers of attorney should fit into it. Contact us to discuss your planning needs.