A power of attorney is a legal instrument that grants a designated individual (the agent) the authority to make decisions on behalf of another person (the principal). When the power of attorney is durable, the agent retains their authority even if the principal becomes incapacitated.
Before granting someone power of attorney, or if someone granted you power of attorney, it’s crucial to understand the rights and limitations Texas provides for those given this power. The Austin power of attorney lawyers of Smith & Bledsoe Family Law can help.
Rights and Limitations of Power of Attorney
A power of attorney allows the principal to appoint an agent to act on their behalf in specific matters. For example, some of the rights a principal may give to their agent include the right to manage:
- Financial Transactions – Agents can manage bank accounts, pay bills, and handle investments on behalf of the principal.
- Real Estate – Agents can buy, sell, or manage the principal’s real estate properties.
- Legal Actions – Agents can initiate or defend legal actions on behalf of the principal.
- Healthcare Decisions – Agents can make decisions about the principal’s healthcare, including what doctors they see and treatments they undergo.
Additionally, the principal may restrict how the agent can perform their duties by limiting their:
- Scope – The principal can limit the agent’s powers to specific tasks, such as only managing real estate properties.
- Time – The principal may only grant the power of attorney for a specific period.
- Fiduciary Duty – The principal can require the agent to act in their best interest and avoid conflicts of interest.
Durable vs. Springing Power of Attorney
A durable power of attorney is not the only type of power of attorney that involves the principal becoming incapacitated. There’s also a springing power of attorney. Understanding the differences can help you choose which is suitable for your situation.
Durable powers of attorney are effective immediately upon signing and continue through the principal’s incapacitation. If you want to grant someone power of attorney now and want them to continue to have that authority, this may be the right option for you.
Springing powers of attorney only come into effect upon a triggering event, which is typically the principal’s incapacitation. The agent receives power of attorney after a medical professional deems the principal incapacitated. If you do not want to grant someone these powers until necessary, this could be the right option for you.
Financial Power of Attorney
A financial power of attorney is a type of durable power of attorney that grants the agent authority over the principal’s financial matters. It remains in effect as long as the principal is alive unless the principal revokes it.
An agent with financial power of attorney may be able to manage bank accounts, investments, and real estate transactions. However, they must also keep detailed records and report their actions to the principal or a designated third party. Some of their key responsibilities include:
- Managing financial assets on behalf of the principal
- Filing the principal’s taxes
- Overseeing the principal’s business interests
Durable Power of Attorney for Healthcare
A durable power of attorney for healthcare grants the agent authority to make medical decisions on behalf of the principal. This type of power of attorney is crucial for ensuring healthcare decisions adhere to the principal’s wishes, especially in situations where the principal cannot advocate for themselves.
Some of the key responsibilities agents often receive through durable powers of attorney for healthcare include:
- Consenting to or refusing medical treatments on behalf of the principal
- Accessing the principal’s medical records
- Deciding on long-term care arrangements for the principal.
Healthcare Proxy vs. Durable Power of Attorney
Two primary legal instruments for making medical decisions on behalf of an incapacitated person are durable powers of attorney for healthcare and medical proxies. The differences between the two are similar to those between durable and springing powers of attorney.
A healthcare proxy is someone designated to make healthcare decisions for the principal if they cannot advocate for themselves. This authority only goes into effect when the principal cannot make decisions independently. Healthcare proxies also have limitations on the types of treatment they can consent to on the principal’s behalf.
A durable power of attorney for healthcare grants the agent broader authority and is effective immediately. There are fewer limitations on the types of treatments they can consent to, and they can often also make financial decisions related to the principal’s healthcare.
Termination of Durable Power of Attorney
Durable powers of attorney are not permanent once in place. There are a few ways these powers can terminate under Texas law, including when:
- The principal dies
- The principal revokes the power of attorney
- The power of attorney includes a termination date or clause
- The power of attorney accomplishes its purpose
- The agent dies, is no longer qualified, or resigns
- The court dissolves the agent’s marriage to the principal
- There is a permanent guardian of the principal’s estate
To revoke a durable power of attorney, the principal must be mentally competent and provide the revocation in writing. The steps to revoke a durable power of attorney include:
- Drafting a written document stating the revocation of the powers of attorney
- Providing the agent with written notice about the revocation of their authority
- Notifying banks, healthcare providers, and other relevant parties of the revocation of the agent’s authority
- Filing the revocation with the county office that initially recorded the power of attorney
Austin, Texas, Family Law Attorney
If you plan to establish a durable power of attorney or if a principal named you as their agent, you should speak to a family law attorney. An experienced attorney can assist you in drafting or understanding the rights and limitations of your durable power of attorney documents.
At Smith & Bledsoe Family Law, our team of professional family law attorneys can assist you with every aspect of estate planning, including determining when and to whom you want to grant power of attorney. Call our office at (512) 277-3166 or contact us online for a free case evaluation about protecting your best interests in the future.