What are Powers of Attorney? Why do I need them? What happens if I don’t have them?

When we say that Powers of Attorney are important, we really mean it.  Speaking not only from experience in drafting incapacity documents, but also from experience, Powers of Attorney: 

·      Eliminate the need for someone to hire an attorney.

·      Go to court for a guardianship.

·      Spend unnecessary money for court costs, attorney and ad litem (attorney for you) .

What happens if you are in an accident and are not able to make decisions for yourself?  Powers of Attorney allow someone to step in as your agent and make financial and medical decisions for you.

There are two different types of Powers of Attorney.

1.    Durable Power of Attorney.

The Durable Power of Attorney, AKA Financial Power of Attorney, can give your agent permission to pay bills, sell and buy property, assist with governmental benefits, handle tax matters, and take care of banking, financial and business transactions.

You can give your agent (the person you are choosing to give this power) the option to give cash gifts or you can choose no gift-giving power.

You can choose to compensate your agent or simply make sure the agent is reimbursed. 

You can make your Durable Power of Attorney effective immediately or upon your incapacity.  How do you decide which way to make it effective?  By making it effective immediately, your agent could access your bank accounts, etc.  This is why we always recommend appointing someone that you trust.  If you make the Durable Power of Attorney effective upon your incapacity, your agent will take you to a doctor for an examination.  If the doctor agrees that you are not able to make decisions on your own, he/she will write a letter to be attached to the Durable Power of Attorney so that it becomes effective.

2.    Medical Power of Attorney

The Medical Power of Attorney gives your agent the ability to make health care decisions for you when you are incapacitated. If you can make decisions on your own, this document is not in effect until your doctor agrees that you are not able to make decisions on your own.

What if you are in a coma or need life sustaining treatment?  We have a document that is called a Directive to Physicians.  Many people call it a “living will.”  This document allows you to decide whether you want to be kept alive in a terminal condition using life-sustaining treatment or you can request that all treatments other than those needed to keep you comfortable be discontinued.

As part of your incapacity documents, our estate planning lawyer in Austin will prepare an Appointment for Disposition of Remains.  This document allows you to choose an agent to be responsible for your remains along with how you would like your remains to be treated.  While it is a serious document, this is one of the documents that has had the most interesting responses.  You can request to be buried or cremated.  Some have requested to be cremated and the ashes be joined with a favorite pet.  Whatever choice you make, our Austin estate planning attorney will make sure it is in writing, so your agent is aware of your wishes. 

What happens if you do not have these documents?  If you become incapacitated and you do not have a Financial Power of Attorney or Medical Power of Attorney, Texas will require a guardianship.  This is a long process that starts with obtaining a letter from a doctor that states you are, in fact, incapacitated. From there, your family would hire an Austin power of attorney lawyer, such as our law firm, to file an application with the court.  The court appoints an ad litem (which is another type of attorney) that represents you.  Once the court appoints a guardian, the guardian will be required to file two reports with the court annually. The first report will be to show your financial records: what money was deposited into your account and what debts, payments, withdrawals were made and who they were payable to. The second report is on your welfare: what doctor appointments you attended, what kind of activities you are involved with, and what your day-to-day life is like.  Like we said, it is a long process that can be easily avoided by having Financial Power of Attorney or Medical Power of Attorney.

Anyone who is over the age of 18 and is able to make decisions on their own should have Powers of Attorney in place.

Let our Austin estate planning lawyers help you and your family. Contact Hardie Alcozer PLLC for more information and to start the process of preparing these very important documents.