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Limitations on Durable Power of Attorney

Being in a situation where you would like to have a power of attorney established means that you should learn as much as you can about this subject. Your health and well-being are at stake, and you need to be able to guide your agent as well as possible in the power of attorney document. The agent is the person who is expected to make decisions on your behalf if you become incapacitated. You would be known as the principal in this arrangement. Your agent should be someone that you can trust as well as a person who is intelligent enough to be able to read and analyze basic information about your health.

Being incapacitated is the key to having your durable power of attorney become effective. This could mean that you were injured in an automobile accident and have been in a coma ever since. Or, you may be undergoing a surgical procedure over an entire day and are sedated as a result. Your durable power of attorney could be effective during the period that you were under anesthesia and unable to make decisions for yourself because you were unconscious. You could also have been institutionalized due to a mental health concern and have a power of attorney in effect because of this.

The bottom line is that you need to be able to have some sort of documentation showing that you are unable to make decisions for yourself because of your current condition. A letter from a doctor is a good place to start to establish that you are unable to make decisions for yourself for a certain time. This is different from a situation where you are going to be permanently incapacitated where a guardianship proceeding may need to be started through the probate court.

What is a durable power of attorney?

When we consider what a durable power of attorney is, we usually look at it from the perspective of health care related decisions and issues. Having a durable power of attorney means that you can plan for future events and take into consideration how best to plan out your life if you become unable to make decisions for yourself. This usually happens if you are incapacitated for any number of reasons. Having a durable power of attorney means that you can ensure that someone you trust will be able to make decisions on your behalf when you are not able to do so.

As we talked about earlier, a power of attorney document allows you to determine in advance who you trust and want to be able to act on your behalf if you are unable to make decisions for yourself in several different areas of your life. There is a medical power of attorneys which pertains only to medical decision-making. The person you name as the individual who will be making those decisions on your behalf is known as your agent.

When you are incapacitated, two areas of your life will require your focus: your health and your finances. A medical power of attorney will help you sort out issues related to your health. The agent that you name in this power of attorney can make decisions about the subjects you list out in the power of attorney if you become incapacitated. On the other hand, a financial power of attorney will give your agent the ability to make decisions that are financial on your behalf. You can have one power of attorney or both. You could name the same person to act as your agent in both or you may want to have one for each. For instance, if you have someone in your life whose decision-making you trust especially in money matters then you may want that person to be your agent in the financial power of attorney. On the other hand, if you have a person who is familiar with your medical condition or is a medical professional then that person may become your health care power of attorney.

Rights and limitations as contained within a power of attorney

Depending upon how you draft the document, the powers, and authority provided to your agent in your power of attorney could be broad or narrowly tailored. Here are some areas of your life that a power of attorney could be able to make on your behalf if you become incapacitated. When it comes to health care related decisions then the agent may be able to determine what sort of medical care you receive while you are incapacitated. Whether that care means going to a hospital, having a particular surgery, or going through hospice care, your power of attorney should spell out the exact rights that your power of attorney has.

Keep in mind that some medical decisions that the agent can make will depend upon your financial situation, as well. If your financial power of attorney does not permit the medical power of attorney to take a certain step with your care, then he or she will not be able to do so- even if this goes against the advice of a medical professional. To that end, however, if you want your medical power of attorney to be able to make decisions about which doctor can treat you then that is something you should provide for in the power of attorney document.

A major consideration that a power of attorney agent can decide for you is where you will live during your period of incapacitation. Long-term care facilities, nursing homes, and memory care centers are all options for a person who is still living but is not at their normal level of cognition. Again, we would point out that in some cases it may be easier and more appropriate for a guardianship to be set up instead of a power of attorney. The power of attorney may be lacking in specific details and may not be broad enough to allow your agent to do what needs to be done for your care. If that is the case, then a loved one or anyone who can do so under the law may start guardianship proceedings to better provide care for you.

If you have separate powers of attorney for medical and financial issues, then those people will need to coordinate their efforts to promote your financial and medical well-being. All these medical decisions will come with a financial cost. The last thing that you want to see happen is that your medical needs cannot be met due to an issue of your financial power of attorney not disbursing enough authority to that agent. It is a good idea for you to think about these two powers of attorney documents as a tandem venture rather than as separate entities. Hopefully, you can see the power of coordination and working these two documents as tandem items.

How you eat and what you eat while you are incapacitated is an important and often overlooked factor. In some situations, the decision about how and what you will eat will be made for you, such as if you are being fed through a tube or other means. However, in other situations, you may want to include provisions in your power of attorney document about how you will eat and what you will eat if you become incapacitated. Another area that your power of attorney for medical issues can cover is hygiene issues such as who will bathe and care for you.

Overview of the financial power of attorney document

A financial power of attorney provides an agent with the ability to do the following types of actions in most situations. Please note that you can define the parameters of the document, however, and can make it either as broad or as specific as possible. Your financial accounts are usually off-limits to other people in most situations. Banks and credit unions spend a lot of time and money on making your accounts as safe as possible. However, if you find yourself in a position where you are not able to make decisions for yourself due to an unforeseen accident or something like that then you may need someone else to be able to help make sure that you can receive the care that you need to get better. Often this means paying bills using those financial accounts which are password protected.

In that case, you may need to specify in your power of attorney document that your agent can gain access to your financial accounts and use the money to pay for medical care, household bills, or other costs that come up. Again, if this is a power that you would like to grant to your agent then you should be as clear and specific as you can be within the document when it comes to naming that power. Including things like websites, logins, passwords, and security question answers are all good ideas. This information should be kept securely, and you should not give out the information to just anyone.

Death and taxes is the old joke about what two things are unavoidable in life. Taxes do not go away or even go on a break just because you are incapacitated. Therefore, you need to make sure that someone is out there who can pay your taxes for you if you are unable to do so yourself. Some people pay taxes once a year in April. Others have quarterly estimated taxes to pay on their small business. Whatever situation you may find yourself in you should have a provision included in your financial power of attorney that allows your agent to file your taxes and pay them as well. At the very least a tax return needs to be filed if not paid immediately.

Depending upon your situation you may someone who has investments in the stock market, real estate, or somewhere else. To maintain those investments and keep your income afloat during this period it may be in your best interests to allow your power of attorney to be able to make investments on your behalf while you are incapacitated. Again, if you want your agent to be able to perform these actions for you then you should be as specific as you can be. For example, if you want the type of investments to be limited to a particular area then you can lay that out in your power of attorney document.

Let’s consider a situation where you are a landlord and this is where your primary source of income is drawn from. If you are someone who owns a lot of real estate, then you have quite a bit of responsibility. You will need to be able to make sure that your renters are cared for and property issues are taken care of as well as maintained. On top of that, collecting rent payments is an important part of the process involved with being a landlord. Again, if you want your agent to be able to handle matters associated with your rental properties then you should figure out how to specify this in your power of attorney document.

This same rule applies to property across the board that you may own. It doesn’t matter if you own real estate, farm animals, or are a professional, you need to have a plan in place if you are unable to discharge your duties for work. Attorneys are supposed to have contingency plans as part of their professional liability and conduct as far as a lawyer or lawyers who can step in and are for clients in the event the attorney is unable to do so. Otherwise, your clients will be left out in the cold through no fault of their own. While attorneys may need to have another document drafted other than a power of attorney, others of you reading this blog post should think about including provisions like this in your power of attorney document.

If you are someone who is quickly running out of money while you receive medical care, then you should consider applying for different types of government programs that you may become eligible for. If you are incapacitated or otherwise unable to do these applications yourself then you should consider including a provision in your financial power of attorney document which allows for Your agent to apply for these programs on your behalf. You may need to have the agent include your power of attorney document along with any applications that are filed.

Limitations on a durable power of attorney

In today’s blog post, we have already walked through several limitations on the power of attorney document. Most of those limitations relate to limitations that you would create yourself if you were overly specific in the power of attorney either intentionally or by accident. The more specific you are the fewer powers your power of attorney likely has. In that case, you should think clearly about what your agent should be able to do within the confines of that document.

A major area that your agent will not be able to make decisions or act on would be to change your will. A power of attorney gives an agent authority over certain aspects of your life if you become incapacitated. However, the power of attorney stops at the point where you pass away. In that case, the power of attorney document would not extend to give your agent authority to do anything relating to your estate after you pass away. Your agent could be named as the executor of your will or can ask a probate court to become the administrator of your estate if you die without a will. However, these actions must be taken outside of the power of attorney document itself.

Your agent can also not change the power of attorney or transfer their agency powers to another person. However, an agent may step aside in that capacity at any point he or she chooses. In that case, the agent still would not be able to choose their replacement unless you have named a secondary agent within the same power of attorney document.

As you can see, there are many different attributes of a power of attorney document that you can take into consideration. Depending upon your circumstances you may want a general power of attorney or very specific document. Whatever your situation is, it is worthwhile to consider Speaking with an experienced estate planning attorney before making any decisions about important documents like durable powers of attorneys, wills, and trusts.

Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material contained in today’s blog post please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way to learn more about the world of Texas estate planning as well as how your family’s circumstances may be impacted by the filing of a probate case.

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