Whether you’re new to the arena of putting together a power of attorney or whether you have had one in place for some time, it’s important to consider how the structure of your power of attorney influences when another individual is able to act with the powers listed within. The majority of individuals may benefit from a durable power of attorney for property as well as a power of attorney for healthcare, which might also be referred to as a healthcare proxy.
A power of attorney for property will give another individual the ability to act on your behalf in the event that you become temporarily or permanently disabled. When properly structured, a property power of attorney can help to avoid court appointments for conservators or guardians. A health care power of attorney, on the other hand, allows the appointed agent to represent the principal in the event of incapacity.
A power of attorney can be customized to some extent based on your individual needs. You’ll encounter critical questions during the drafting of your power of attorney to accomplish this process. Some of the questions you might need to consider ahead of time are whether you’d like the agent to be empowered to fund a living trust, whether the agent will be allowed to make gifts on your behalf, and whether you’d like to name co-agents. Since estate planning can be complex even for a seemingly simple power of attorney, it’s recommended to work directly with a Texas estate planning attorney to ensure compliance with all state and federal laws.
Although all of the above questions may be important in the drafting of your power of attorney, one of the most critical questions is whether your agent should be equipped with springing powers. What this means is whether you should structure your power of attorney to become effective immediately after it is executed or whether you only allow the agent to act on your behalf as a result of a triggering event. For example, becoming disabled or incapacitated would officially empower the appointed agent to act on your behalf, but he or she would not be equipped with the opportunity to do so ahead of such an event.
The primary argument against giving an individual agency immediately after the execution of a power of attorney has to do with concerns over abuse. There are also challenges associated with the structure of a power of attorney involving springing powers. For example, if a simple process to determine disability is not outlined that enables the appointed agent to act on your behalf, delays may ensue that limit or defeat the purpose of putting a power of attorney in place.
One way to avoid such a problem is to structure your power of attorney to limit access to springing powers. Your Texas estate planning attorney can keep the original documents with instructions to deliver them to the appointed agent only if the attorney or another advisor believes that present conditions necessitate immediate action to aid the principal.
There are advantages to each approach in crafting a power of attorney, so it’s in your best interest to consult with your estate planning specialist in advance to determine which one is the right fit for you.
If you have any questions or need legal representation, please call us at 817-953-9656.