Careful, deliberate and early estate planning can avoid a lot of legal and financial problems. All Texans should think about authorizing someone else to transact business on their behalf in the event they become incapacitated. This is done by properly executing a Statutory Durable Power of Attorney. Doing so avoids the hassle, delay and cost of a legal guardianship that would otherwise be necessary in order to have your financial affairs properly attended to if you are incapacitated. Today's blog will answer some of the frequently asked questions surrounding this important estate planning document.
Who should I grant power of attorney to?
Texas law allows you to grant power of attorney to any adult person. You should carefully consider the options. The person you designate should be someone you trust to manage your affairs competently and with complete honesty. Ordinarily, people name their spouse to serve as agent under the power of attorney. You can also name back-up agents, such as your adult children, siblings or close friends.
Can I name co-agents to serve jointly?
Yes. However, there are often logistical issues surrounding two or more people working together to manage your affairs, such as coordinating efforts and communicating pertinent information and transactions. Often, people who appoint co-agents do so in an attempt to avoid offending certain family members. Generally, this sentiment should not get in the way of doing what's simply in your best interest. If you choose to appoint co-agents, you can designate whether the co-agents may act independently of each other, whether they have to agree on each action to be taken, or whether a majority of the co-agents decisions prevail.
What does the Statutory Durable Power of Attorney give the agent authority to do?
You can designate in the document exactly which categories of transactions to authorize the agent to have. Some of the most common categories inclue real estate transactions, stock and bond transactions, banking transactions, operation of business, claims and litigation, personal and family maintenance, government assistance programs, tax matters and retirement plan transactions.
Does my agent receive compensation?
You can elect in the document whether your agent will be compensated for the time he/she spends assisting you, for out-of-pocket expenses incurred on your behalf, neither time nor expenses, or both time and expenses. If you opt to have the agent receive compensation for time spent, the amount of compensation is that deemed to be "reasonable under the circumstances".
When does the agent's authority begin and end?
You can elect whether the agent's authority begins immediately, or only upon your incapacity. If only upon incapacity, the document can define what incapacity means, or if no definition is given, a physician must certify that, based on his/her examination, you are mentally incapable of managing your financial affairs. The agent's authority ends when you revoke the document. When revoking the document, you should inform the agent, in writing, that the authority has been revoked.
Preparing for future incapacity is an important part of your estate plan. Having an entire estate plan will bring comfort to you and to your family, knowing that in the event of a tragedy or inevitable aging that causes you to become incapacitated, your financial affairs can be appropriately managed. The estate planning attorneys of Christiansen Law Firm have significant experience preparing Statutory Durable Powers of Attorney and advising clients about the legal effect of estate planning documents. For additional information about your estate plan, contact the offices of Christiansen Law Firm in Houston or San Antonio.