A power of attorney is a legal document- not a physical person. The power of attorney document gives another person the legal right to act in some capacity on your behalf when you are not able to do so yourself. Let's say that you have a power of attorney document which gives your brother power of attorney over some area of your life. In that scenario, you would be the principal while your brother would be your agent. Despite what the name of the document may indicate, the person you list as a power of attorney does not have to be a licensed attorney. It would just need to be someone that you trust.
There are multiple types of power of attorney documents. The first is a power of attorney known as a general power of attorney. This document gives another person the authority to act on your behalf in several different areas. If you were to become mentally or physically handicapped, then the general power of attorney would come to an end. The reason for this is that your ability to direct your agent on your behalf cannot happen when you are shown to be mentally or physically incapable of making decisions and directing another person in this way.
A limited power of attorney does just what you think it might based on the name- it gives an agent authority to handle something specific on your behalf when you are not able to do so. For example, let's say that you are a real estate investor who has a major closing on a property that you are selling. The closing is coming up in one week, but you broke your leg and will be having surgery on the date of the closing. There were no alternative dates for the closing, and you had to make do with it. As a result of this, you may want to have a limited power of attorney document created so that another person can act on your behalf at the closing.
A durable power of attorney has some similarities with a general power of attorney with one major difference. The durable power of attorney will continue even if you were to become incapacitated or otherwise physically/mentally capable of caring for yourself and making decisions on your behalf. Your agent will have the authority to act on your behalf no matter what happens to you.
All these power of attorney documents would go into effect immediately upon their creation and may come to an end (or pause) was another condition occurs such as a mental or physical impairment developing. A springing power of attorney is another type of power of attorney that can create. The power of attorney springs into action now that you become incapacitated. This is almost like having your cake and eating it too. During the periods where no springing event occurs the power of attorney carries no weight. However, the power of attorney springs into action once a disability or incapacitation occurs.
The last type of power of attorney is called a medical power of attorney. When you become physically or mentally incapacitated and are no longer able to make medical decisions for yourself then the power listed as your agent in the medical power of attorney would be able to make decisions for you according to the terms of the document. Be sure that your power of attorney is someone that understands their responsibilities. You should ask before someone becomes a key part of your legal power.
When does a power of attorney document become valid?
There are a handful of conditions that must be established to have a legal power of attorney document. The first is that you must sign the power of attorney in front of a notary. This means that you need to wait to sign the power of attorney until you get in front of the notary. A notary is someone who helps to verify the legitimacy and trustworthiness of a document.
You will need to be at least 18 years of age to have a valid power of attorney document. Being of sound mind and body must be your status were you to create a power of attorney document. If you know what you are doing when you create a power of attorney from scratch, then you may be able to accomplish what you set out to do: have a valid power of attorney that creates the principal/agent relationship that we just finished discussing a few moments ago.
One of the most frequently asked questions at the Law Office of Bryan Fagan is whether your agent in the power of attorney can ultimately tell you what to do, If this was a concern of yours then you can sleep somewhat easier. A power of attorney document which names an agent does not give that person a blank check to begin doing whatever he or she wants. Additionally, the person cannot tell you what to do. However, he or she can act on your behalf in situations described within the power of attorney document beforehand. Make sure to review the power of attorney document regularly to make sure that it reflects your intentions before it is too late, and it cannot be reversed.
The power of attorney can end in a few different situations. The most obvious of those situations is if you place an ending date within the power of attorney. You may be out of the country for an extended period and only want the power of attorney to exist while you are gone. So, you name a business associate or family member to be able to sign documents or attend to matters on your behalf (listed in the power of attorney) while you are gone. The power of the internet makes the signing of documents easier if you are not physically located in the country but there may be situations where this is required of you.
A durable power of attorney has no end date which may be important if you become incapacitated. The key to any principal-agent relationship is that the principal must be capable of giving orders to the agent. Here, if you become incapacitated you would no longer be mentally capable of making those sorts of decisions or giving orders or instructions. A durable power of attorney would persist despite the incapacitation. However, in other situations, the durable power of attorney would win out and you would see your power of attorney last despite the limitations created by the incapacity.
When you revoke a power of attorney then the document comes to an end. You may not feel comfortable with having the agent in your power of attorney set up to continue to have that power. As a result, it could be that you want to revoke the agreement and create a new power of attorney that vests authority to act on your behalf in a different person. Or you may only want the power of attorney after it has lasted for a certain period and are now comfortable with revoking it.
If a guardian from a court is appointed for you that would also end the power of attorney. In a situation where you are comatose, incapacitated, or otherwise unable to look after your matters for yourself this is a viable alternative to end the power of attorney. A family member, spouse, or other person could petition the probate court to obtain an order appointing a guardian to look over your estate. That person would oversee your affairs and act as a fiduciary on your behalf. Thus, there would be no need for a power of attorney.
Finally, when you pass away the power of attorney would also be voided. The same principle applies to becoming incapacitated.
What do you need to know about forming a durable power of attorney?
If you become incapacitated, then a power of attorney ends as a rule. However, a durable power of attorney would continue even if you were incapacitated. These types of power of attorney documents will last and last without end. There are good reasons why you would want to draft a durable power of attorney document despite the unlimited length of time that they can last. However, there is a certain amount of scrutiny that will be paid to a durable power of attorney, so you need to pay attention to the requirements to have one drafted validly.
A durable power of attorney must be in writing and needs to name the person that you want to have the power of attorney abilities. You must then sign the power of attorney and get it notarized. Finally, you will need to specify the authority that can be vested in your power of attorney and then discuss in detail how the power of attorney is to be used. The contexts that the person may act on your behalf, the subject matter that is relevant to the power of attorney, as well as the limitations that you would like to be built into the case, are all relevant factors to consider placing into your power of attorney document.
The main advantage of having a durable power of attorney is that you may not need a probate court to appoint a conservator or guardian over your estate if you become incapacitated. The people in your life will know that you have named a person who has power of attorney over your affairs and decision-making. A costly, time-consuming, and difficult guardianship case may not be necessary. One issue to keep in mind is that a third party does not need to accept the power of attorney. For example, if you name a person to be able to execute a real estate contract on your behalf the title company may not accept the power of attorney and can ask for you to sign the documents as in a typical closing. A guardian being added to oversee the affairs of your estate would make the power of attorney go away.
Picking the right agent for you
Keep in mind that you may be facing certain circumstances which require you to create a power of attorney. Once you decide that creating a power of attorney is a necessary thing for you the next question that you should ask yourself is who you should name as the agent. Keep in mind that the person you name as your agent should be someone that you would trust with the life of your spouse and children. In some cases, your agent will be tasked with attending to matters related to your family and even doing this that directly supports their well-being. This is an important decision that you should take very seriously.
We can all think of several qualities that a power of attorney agent should have like integrity and honesty. The agent needs to be willing to follow your instructions and not second-guess you. The executor of your will would do the same (hopefully) after you pass away. The main difference, of course, is that you are alive when you name a power of attorney. You can oversee what he or she is doing and then revoke the power of attorney if you do not like their actions.
Medical power of attorney
A medical power of attorney is a document that gives someone else the ability to speak to health care providers. This would all be done in a situation where you are unable to make healthcare-related decisions for yourself. Medical power of attorney forms can only be sued if the person who created the medical power of attorney (you) become incapacitated. This is a key difference between a typical power of attorney and a medical power of attorney. Were you to become incapacitated or incompetent and a letter can be obtained from a treating physician verifying this then the medical power of attorney could go into effect.
A medical power of attorney is something that can be used in only limited situations. First, you must be incompetent- meaning that you are unable to make decisions for yourself due to a mental or physical impairment. Next, once you are no longer incompetent to make decisions for yourself the person that you name as your agent can no longer act on your behalf in a medical setting. At any point in the process, you can decline medical treatment no matter if you are incompetent.
Your spouse or adult children can make decisions related to medical care no matter if you have a medical power of attorney, or not. Your parents or an adult relative who you communicated to your treating providers can make decisions on your behalf and may also act in this capacity. It could be that you and your spouse are injured or otherwise impaired in an accident at the same time. In that situation, you all may want to each name a person in advance who can make medical decisions for either one of you.
Finally, one question that we receive regularly has to do with an advance directive and how it is different than a medical power of attorney. A medical power of attorney is a much broader document that gives authority to another person to carry out your wishes in a medical context. An advance directive can only give instructions about continuing or discontinuing lifesaving medical treatment if you have a terminal condition. If you are expected to die without life-sustaining treatment due to an irreversible condition and you cannot make decisions for yourself then an advance directive can also provide instructions about ongoing care. The advance directive will win out in a situation where an agent that you have named provides different instructions to medical providers about treatment for an irreversible or terminal condition.
Be intentional and have a plan for your future
Everything that we have discussed in today's blog post has something in common. The person who has a power of attorney, medical power of attorney, or advance directive is a person who has thought ahead and has a plan for themselves. Life could be completely normal one day and then change dramatically the next. This does not have to be an unforeseen situation. Rather than take things day by day, it is a better route to be intentional. How do you see these situations playing out for you if you have no plan? If you feel like you are in a vulnerable position after reading this blog post do not worry from the comfort of your couch. Get up, be intentional, and have a plan for yourself.
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 by phone, in person, and via video. These consultations are a great way to learn more about the world of Texas estate planning as well as what can result in the event a probate case is filed on behalf of a family member.