There is a dandy durable power of attorney form in the Texas statutes. It serves as a great starting point for drafting.
Note what is not a good starting form (or, heaven forbid, a final form). That would be a document you downloaded from the internet, or purchased in a generic multi-state software package, or copied from your friend down the street. Don’t do that.
A durable power of attorney is a document that appoints an agent to act on your behalf in financial matters. It’s a very handy tool that formalizes the relationship between you and an agent. In the best of worlds, it helps you keep control of your finances and goes a long way towards avoiding guardianship.
For a lot of people, a durable power of attorney works just fine. As a start, the statutory form gives your attorney-in-fact (your agent) some standard powers. But it’s important to note that your agent has only the powers that are specifically granted, and a lot of times the standard powers aren’t broad enough.
What additional powers might you want to include? That depends upon your circumstances. If you think you may need to qualify for Medicaid (to pay for long-term care) or need some estate tax planning, then you may want to give your agent a broader power to make gifts. For example, you could authorize gifts to be made in trust as well as outright. You might want to require that gifts be made equally to members of a class (eg “all grandchildren”), or authorize the agent to make gifts to herself.
If you anticipate that your agent may need to create a Trust for you, then that has to be specifically stated. There are all sorts of additional trust creation powers that may be appropriate, such as creating a revocable management trust, or an irrevocable trust for Medicaid or estate planning purposes.
You may want to give your agent the right to designate beneficiaries on life insurance and annuities, or to create P.O.D. bank account. Perhaps your agent should have rights to deal with digital assets, tax matters, or hire health care workers.
Your durable power of attorney is an extremely important document. Spend the time now to get it right.
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The information contained in this article is general information only and does not constitute legal advice. ©2015