A financial power of attorney is a legal document that one uses to give an agent the authority to make financial decisions on their behalf. A principal is typically the person who grants permission to the agent to make decisions for them as they see fit. The agent is typically the one given the authority to make decisions for the principal. A financial power of attorney has the potential to go into effect either immediately or as soon as a financial decision is to be made. An agent can be called upon to make the decisions typically when the principal is unavailable or incapacitated, but this is not a requirement. In some cases, the principal is available and able to decide for themselves but still allows someone else to be their proxy.
A medical power of attorney is a legal document signed by a willing and competent principal, which can allow for an agent to make health care choices for the principal. An agent has the right to make medical decisions for the principal This occurs after the principal’s physician verifies, through writing, that the principal is incompetent or incapacitated and can not do so themselves.
A financial or medical power of attorney can be terminated upon the death of the principal or may be revoked by the principal, whether competent or not. If the agent appointed in your power of attorney is your spouse, the power of attorney typically ends upon divorce unless otherwise stated in the document itself or a new one is drafted after the divorce naming the ex-spouse as the agent. The authority given to an agent by the principal can be revoked if a court invalidates it, or if the agent is incapable of making decisions and there is not an alternate agent to replace them.
To legally qualify as an agent you typically must be at least eighteen years old. An agent is supposed to make choices that are in the best interest of the principal, but it is still possible that the agent may make unlawful or selfish decisions. Because of this, it is important that the principal choose someone that they trust and someone who is aware of their interests, wishes, and religious beliefs. A financial power of attorney allows the agent to make decisions on financial matters like personal property transactions, claims and litigation, retirement benefits, tax benefits, banking, and other financial institutions, and more. A medical power of attorney allows the agent to make decisions on most health care provisions, but they cannot agree to a commitment to a mental institution for the principal, convulsive treatment, psychosurgery, an abortion, or consent to neglect to comfort care.
While there are restrictions a power of attorney gives one the right to act and speak for you on very important matters. These documents should not be taken lightly or drafted on a whim. It is always a good idea for one to consult their estate planning lawyer in Arlington, TX, if possible, before making these important legal decisions.
Thanks to Brandy Austin Law Firm, PLLC for their insight into estate planning and power of attorneys.