Power of Attorney - Estate Planning
A durable power of attorney allows a designated individual to handle financial aspects of one’s life. Typically, a power of attorney is used in the event of a temporary incapacitation. On the other hand, a guardianship is used for long-term or permanent incapacitation.
What is a power of attorney?
A power of attorney is a legal document used in estate planning to give a designated individual (the “agent”) powers to handle one’s affairs such as entering into a contract, buying, selling, giving gifts, etc.
A power of attorney can be:
- General: granting broad powers; or
- Specific: granting powers for a specific reason or transaction.
A durable power of attorney lasts beyond one’s incapacitation which would otherwise terminate a non-durable power of attorney, discussed below.
Do I need a power of attorney?
The purpose of a power of attorney is to allow someone to handle your affairs in the event you cannot. Having a power of attorney can greatly reduce the stress on loved ones who will be responsible for caring for your affairs in the event you cannot.
If you own property or pay bills and you become unable to take care of those obligations, having a power of attorney helps your agent handle your affairs. Or, in the unfortunate event your incapacity is more permanent, the agent can handle things until the court can appoint a guardian.
Does marriage mean spouses have powers of attorney for each other?
No. Being married does not inherently give the other spouse a power of attorney which is why a power of attorney is part of estate planning.
However, unless otherwise specified, if you make your spouse your power of attorney and you get divorced, the power of attorney will end when the divorce is decreed.
What powers does a power of attorney give?
The Texas Probate Code allows you to grant the following powers to an agent:
- Real property transactions;
- Tangible personal property transactions;
- Stock and bond transactions;
- Commodity and option transactions;
- Banking and other financial institution transactions;
- Business operating transactions;
- Insurance and annuity transactions;
- Estate, trust, and other beneficiary transactions;
- Claims and litigation;
- Personal and family maintenance;
- Benefits from social security, Medicare, Medicaid, or other governmental programs or civil or military service;
- Retirement plan transactions; and
- Tax matters.
The Texas Probate Code allows you to grant or limit gift giving powers, which often has to deal with tax implications of the estate tax.
When does a power of attorney end?
A power of attorney ends upon upon the following:
- The end date if one is given;
- When you become incapacitated (if not durable);
- Appointment of a guardian of your estate; or
To whom should I give my power of attorney / whom should I name as my agent?
Only name someone you trust as your agent. This person should be a spouse or close relative whom you can trust. Your agent will essentially have the ability to enter into transactions as if s/he were you.
Contact me, your Houston estate planning attorney about a power of attorney.
Contact me to talk to me about the reasonably-priced estate planning packages I offer which a Power of Attorney.