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Monday, November 20, 2017

What Kind of Power of Attorney Do I Need?

A power of attorney is a potent tool that allows a person to grant someone else legal authority to act on his or her behalf.  The person granting the authority is known as the “principal,” and the person receiving the authority is his or her “agent.”  But because powers of attorney are such powerful tools, it is particularly important to use the right tool for the right job when granting one. This is where having an experienced estate-planning lawyer on your side can be a significant asset.

What types of powers of attorney are available in Texas?

One feature that makes powers of attorney such effective tools is that they are very customizable to meet the particular needs of the principals who create them.  In general, powers of attorney can be divided into four categories:

  1. Limited Power of Attorney
  2. This type of power is best suited for principals who want to give someone authority to handle a specific task or set of tasks.  As the name implies, a limited power of attorney grants another person permission to act on the principal’s behalf, but only for an identified purpose or for a specified period of time.  Examples might include selling or purchasing a property, or managing the principal’s financial affairs while he or she will be unavailable for a period of time.  This is also sometimes referred to as a special power of attorney.

  3. General Power of Attorney
  4. A general power of attorney provides a principal’s agent with substantially more authority than a limited or special power of attorney because the agent’s ability to act is not restricted to a defined role or timeline, and allows him or her to exercise control over most aspects of the principal’s financial and property interests.  Although general powers of attorney are not limited in duration as a special power of attorney might be, they automatically terminate if the principal becomes incapacitated.

  5. Durable Power of Attorney
  6. Durable powers of attorney are distinguished by continuing to have effect after the principal is incapacitated.  This feature makes durable powers of attorney particularly useful for estate planning purposes, as they allow principals who are planning for their final years to make arrangements to turn over control of their financial affairs to a trusted agent knowing that agent will continue to manage those affairs even if the principal begins to suffer from mental health issues that limit or eliminate their capacity.

    Durable powers of attorney can be written to contain most of the features of either limited or general powers of attorney, such as being limited to particular purposes or properties in a way that is tailored to meet the needs of the principal.  However, the State of Texas has also established what is known as a “statutory durable power of attorney.”  A statutory durable power of attorney is simply a durable power of attorney that has been written by the legislature to be available for use by the general public.  The powers it conveys to agents are very broad, however, so principals considering using the statutory durable power of attorney should be careful to read it very thoroughly and be sure they understand the authorities they are granting.

  7. Medical Power of Attorney
  8. A medical power of attorney, also known as an advance directive, is a tool that allows principals to authorize their agents to make medical decisions on their behalves in the event that they become incapacitated.  This is a very important tool not only for those making end-of-life plans, but truly for everyone to have in place.  Any of us could be the victim of a car accident or other catastrophic event, and without making arrangements ahead of time literally life-altering decisions could be made without your input.

A power of attorney can be a very useful tool for managing your affairs, but because they turn over so much control of principal’s affairs it’s critical to be sure they are drafted to meet his or her needs.  When preparing and executing a power of attorney, it’s important to have qualified legal advice.  If you’re considering a power of attorney and have questions, contact the Law Office of Carey Thompson today to arrange a free confidential case consultation.

 


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