While most of us don’t like to contemplate a time when we cannot make decisions for ourselves, the reality is that many people may become incapacitated at some point in their lives. In these situations, it is helpful to have legal documents in place that empower others to make those decisions in your best interest. In Texas, one way to do this is through a statutory durable power of attorney.
Generally, a power of attorney allows you to designate an agent to perform specific functions on your behalf. Under the Texas Estates Code, statutory durable power of attorney can be used to appoint an agent to make certain financial decisions for you should you be unable to do so. Although it cannot be used for healthcare or medical decisions, it is an important part of a comprehensive estate plan.
If you want to start or update your estate plan, consulting with an El Paso probate attorney is the first step in ensuring that your wishes are met in case the worst happens. With the assistance of a skilled attorney, you can put together a plan that works for you and your loved ones.
Understanding Statutory Durable Power of Attorneys
A statutory power of attorney is a legal document that was created by statute (law). This document gives one person — the agent — the power to act on behalf of another with respect to most matters. The person with power of attorney (POA) is known as the agent (occasionally, the attorney-in-fact), and the person who appoints the power of attorney is known as the principal.
When filling out a power of attorney, you will be able to decide (1) who your agent(s) will be; (2) what powers they will have; (3) when the power of attorney becomes effective (immediately, or upon your disability or incapacity). You also have the option of limiting or extending the powers granted to your agent.
Texas law provides a list of powers that you can choose from when filling out your statutory power of attorney form. You can give your agent any or all of the following powers:
- 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;
- Tax matters; and/or
- Digital assets and the content of electronic communication.
Each item that you initially will give your agent power to handle that matter based on the terms of the document (i.e., immediately, or upon disability or incapacity).
Notably, healthcare is not listed as a power in this form. Medical decisions — such as the type of care that you want to receive if you become incapacitated — cannot be addressed through a statutory power of attorney. Instead, the power to make health care decisions is designated through a separate document known as a Medical Power of Attorney.
A durable statutory power of attorney is vital to ensuring that your interests are protected in the event that you cannot make decisions for yourself. For example, an aging parent may sign a power of attorney giving his or her child the power to make important financial and legal decisions on their behalf if they become incapacitated. If that parent slips into dementia, their child/agent can then ensure that their bills are paid, any legal matters are attended to, and their taxes are handled (consistent with the terms of the statutory power of attorney).
When to Assign a Statutory Durable Power of Attorney
One of the most critical aspects of any power of attorney document is setting it up when you — or your loved one — is of sound mind. A power of attorney that is signed when a person is mentally incompetent is not valid.
For this reason, it is important for you and/or your family members to set up a durable statutory power of attorney as soon as possible when you are capable of doing so. This document can be updated as necessary due to life changes, such as changing the agent due to marriage or divorce. Because you can choose to have it become effective only upon your disability or incapacity, there is no downside in having a power of attorney prepared in advance.
However, if you don’t have one in place and become incapacitated, it is too late to sign one. Instead, your loved ones will have to go through a more expensive legal process to ask the court to appoint a guardian. Being proactive can help you avoid this expense, and make sure that someone you trust will be looking out for your best interests if you are unable to do so.
Benefits of a Statutory Durable Power of Attorney
There are many advantages to having a statutory power of attorney in place — and no disadvantages. Perhaps most importantly, when you fill out a power of attorney form, you have the ability to choose who will handle important decisions and which matters they can handle on your behalf. If you don’t have a statutory durable power of attorney in place and become disabled or incapacitated, then you will not have a say in how these matters are handled, or who will handle them for you.
Having a statutory durable power of attorney is also a more cost-effective solution to these issues for your family. As noted above, if you become incapacitated and have not assigned an agent, then your family may have to go to court and have a guardian appointed to ensure that your financial and legal matters are appropriately addressed. This can be a time-consuming and expensive process.
A statutory power of attorney can be credited to suit any individual situation, allowing you to choose how broad an agent’s powers will be and to set limits as you see fit. In this way, you can pick a solution that works for you — and protect your assets in the process.
Ready to Learn More? Reach Out Today.
A statutory durable power of attorney is just one piece of estate planning, but it is an important one. With this document, you have control over how your matters are handled if you are unable to make decisions for yourself. You can also avoid the potential costs associated with going to court, as well as issues that may arise without a power of attorney in place.
Since 1989, Forbes & Forbes has provided high-quality legal representation and advocacy to clients throughout the El Paso area. We offer a range of services related to estates, including drafting both statutory and medical powers of attorney. Contact us today at 877-585-3827 or email us to schedule a consultation with an El Paso probate attorney.