A power of attorney is a legal instrument that allows a person (the “agent”) to legally make decision on behalf of another (the “principal”). Generally speaking, there are two common types of powers of attorney in Texas, a medical power of attorney and a durable power of attorney.
Medical Powers of Attorney
The medical power of attorney is used to appoint an individual to make medical decisions on one’s behalf. This document is only effective in the event an individual does not have capacity to make his or her own medical decisions. In other words, if you have a medical power of attorney, so long as you have the ability to make your own medical decisions, no one else can make medical decisions for you.
Durable Powers of Attorney
A durable power of attorney enables another individual (the “agent”) to make financial decisions on behalf of another (the “principal”). Depending on how it is drafted, the durable power of attorney can vary in scope. Among other things, it can enable an agent to do the following on behalf of a principal: make financial and real estate transactions; operate a business; maintain the principal and principal’s family; manage stocks, bonds, and other investments; address tax matters, and, potentially, much more.
As you can probably tell, a person who holds a durable power of attorney for another potentially has very broad authority together with significant legal responsibility. Thus, it is important to appoint someone you trust and who is willing and able to perform this task should it ever be necessary.
Powers of attorney are an essential part of any estate plan. Without a medical power of attorney in place, Texas law steps in to decide who has authority to make medical decisions on one’s behalf. Without a durable power of attorney, a court may need to appoint a guardian to manage finances for an incapacitated person.
Questions about estate planning or powers of attorney? Contact us.
