A power of attorney (POA) is an important legal tool to include in your estate planning toolbox. This tool allows you to control who makes decisions on your behalf in the event you cannot. This need could arise for any number of reasons from a tragic car accident that leaves you in a coma to a serious disease that results in the inability to convey your wishes. Whatever leads to this need, it is important to establish who you want to make decisions on your behalf.
What happens if I do not have a POA?
Some of your bills may go unpaid while you are unable to take care of these matters yourself. In some cases, the failure to name a POA has led to foreclosure because no one was making timely mortgage payments. If no POA exists, your loved ones can petition the court to pursue guardianship over you and your estate so that they can handle your affairs for you. The guardianship process is lengthy, costly, and burdensome.
What are the powers that come with this legal tool?
The person who creates the POA, referred to as the principal, gets to decide the scope of power given to the named individual, known as the agent. These documents are generally guided by state law.
In Texas, this document may serve a specific purpose or provide the agent with a broad financial power to manage things on your behalf. It can last for set period, allow for the principal to revoke the document at any time as they wish, or expire with the death of the principal.
Who is the right person to serve as my POA?
This is a personal choice. Those who have complex financial affairs like business interests and investments may wish to choose someone with the experience to navigate these financial decisions while others wish to give this power to a family member. Whatever you chose, it is often helpful to discuss the choice not just with the chosen individual but with others impacted by the decision. This can reduce the risk of conflict if/when the POA goes into effect.
It is important to note that this is just one of many legal tools available for those who are drafting their estate plan. The beauty of these tools is the ability to choose the ones that most suit your needs — better ensuring you have the opportunity to tailor an estate plan to your wishes.