Power of Attorney Documents
A power of attorney document gives one person (the Agent) the legal authority to make decisions on behalf of another (the Principal). Powers of attorney are incredibly useful in the estate planning context, as they can prevent the need for costly—and potentially lengthy—court proceedings. At the Houston estate planning law firm of McCulloch & Miller, PLLC, our knowledgeable team of attorneys have more than 35 years of experience crafting effective estate planning documents catered to our clients’ unique needs.The Benefits of a Power of Attorney
Life is full of decisions, many of which are very important. While, ideally, you will retain the ability to make decisions on your own behalf well into your older years, that is far from a guarantee. For example, if you suddenly become ill or incapacitated, who would make decisions on your behalf?
If you didn’t plan ahead, the answer to this question is unknown. Depending on the circumstances, family members may not be able to access much-needed assets or may not know your desires when it comes to the extent of medical care you wish to receive. In some cases, the court may need to appoint a guardian. However, if you have a power of attorney in effect, the person you name as your agent will be able to act on your behalf.
One common misconception about powers of attorney is that these documents provide unlimited authority to act on another’s behalf. That is not the case. There are various types of power of attorney documents, some providing broad decision-making powers and others granting only very limited authority. A Houston estate planning lawyer can help you determine which type of power of attorney best suits your needs and what powers to grant your agent.Types of Power of Attorney Documents
A power of attorney is useful anytime you foresee the need to delegate decision-making power to another person. In any power of attorney document, the person assigning another decision-making power is referred to as the “principal,” and the person they designate to make decisions on their behalf is called the “agent.”
While there are many types of powers of attorney, most situations call for one of three types:Durable Power of Attorney
A durable power of attorney gives another person the ability to make financial or legal decisions on your behalf. Unlike a general power of attorney, a durable power of attorney continues to remain in effect if the principal becomes incapacitated. For example, you could execute a durable power of attorney naming your adult child as your agent, so they could access your bank accounts or buy or sell real estate if you become incapacitated. While a Durable Power of Attorney is a standardized document, you should work with an experienced attorney to help you walk through the elections you make and the specific powers you grant. Granting your agent too much or too little power can have serious long-lasting consequences.Healthcare Power of Attorney
A healthcare or medical power of attorney allows another person to make important healthcare decisions on your behalf if you are unable to do so. A medical power of attorney does not take effect until the principal is deemed unable to make decisions on their own. Healthcare powers of attorney may contain an expiration date; however, if the principal is still incapacitated at that time, the document will remain in effect until they become capable.Springing Power of Attorney
A springing power of attorney only becomes effective upon the occurrence of a triggering event. For example, you may execute a springing power of attorney that takes effect if you become seriously ill, incapacitated or cannot make decisions on your own. However, in this example, your agent would need to obtain a written statement from a doctor certifying that you were unable to make the decisions covered in the document. However, this can be somewhat cumbersome in the events of an emergency so the principal should consider this scenario when making the decision.
All types of power of attorney documents require the principal is of sound mind at the time they execute the document. Thus, while a power of attorney is a fundamental estate planning tool that can save both time and money, to realize these benefits, you must plan ahead.Contact a Houston Estate Planning Lawyer to Learn More
If you wonder whether a power of attorney would fit well within your existing estate plan, you need to update your plan, or you do not yet have an estate plan, reach out to McCulloch & Miller, PLLC, for immediate assistance. We have extensive hands-on experience drafting a wide range of customized estate planning tools and take the time to understand your needs before recommending any course of action. To learn more about the services we provide, give us a call to schedule a free consultation at 713-333-8900.