Estate Planning in Texas: 3 Reasons Power of Attorney Is Important
A power of attorney allows another person to act on your behalf while you are alive. In order to appoint an agent in a manner that is legally binding, you must execute what is called a power of attorney document. The representative you name will then be your “attorney-in-fact.”
Reason 1: A will and trust are not enough.Even the best-laid retirement plans can’t predict the future. Incapacity is a state in which you may not be able to make sound decisions on your own (or you may not have the physical capacity to make your wishes known). Many of us will experience some level of incapacity toward the end of our lives, yet too often, people focus only on their will and trust, and on how their assets will be allotted after their death. But it’s important to make plans for your later years, as well. What good is your will or trust if all your assets have been spent, stolen or mismanaged during your lifetime? Documents that offer you the option to appoint another person to help out with decisions while you are still living—and ensuring that the plans you laid out in your will or trust will be followed—are therefore essential.
Reason 2: You want the power to choose.Ensure that you get to choose who is able to act on your behalf. If you are incapacitated or otherwise unable to make these decisions, someone else will: either the person of your choosing, as designated in a power of attorney, or someone appointed by the Texas court system. This someone will likely be a spouse or child, but could potentially be a court-appointed guardian if Adult Protective Services refers your case to the courts and you do not have a power of attorney in place. If you want to make sure that the person you feel is best suited to the position is empowered to carry out your financial and medical decisions, complete power of attorney documents with the help of an estate planning or elder law attorney. Powers of attorney are used to ensure that certain powers will pass to your chosen trusted representative, often a family member, in the case of an emergency consisting of your own incapacitation (that is, when you lose the ability to make decisions for yourself or the ability to communicate with your financial or medical institutions). Financial and medical powers of attorney documents are two common types of powers of attorney you should know about. Financial powers are often authorized using what is called a statutory durable power of attorney, while medical decision-making is authorized using a medical power of attorney. You can learn a lot more about each of these forms on our website (see link at the bottom of this article). IMPORTANT: You must sign your power of attorney documents if and before you become incapacitated (as determined by a physician).
Reason 3: Don’t miss out of long-term care benefits.You may miss out on access to Veterans Affairs (VA) and Medicare benefits if you haven’t properly allotted your various assets. Properly managed finances can also mean the difference between your estate paying for your living expenses, and a loved one using his or her own assets for these expenses. However, keeping your assets properly balanced is an ongoing job—if you can’t do it, you’ll need an agent who can. Ensure that your assets will work for you and your family even after you can’t—or simply choose not to. A power of attorney will allow you to select the savvy, trusted individual you think can best shoulder this responsibility.