Most individuals have heard of a power of attorney but are unaware of what a power of attorney actually is. In short, a power of attorney gives another person the ability to act on another’s behalf, either for a temporary or permanent amount of time. There are different types of powers of attorneys, each of which is utilized for different purposes. Below are some common questions about power of attorney documents and why they are critical Houston estate planning documents.
What Is a Power of Attorney, and Are There Different Types of Powers of Attorney?
A power of attorney is a legal document that authorizes a designated individual – the agent – to take action on behalf of another, called the principal. There are different types of power of attorneys. Depending on the purpose of designating a power of attorney, the principal may give the agent very broad power or limit their authority to a single purpose or transaction. For instance, a special power of attorney is utilized for a single occurrence, such as when a person wants to buy a house but cannot attend the closing.
Another type of power of attorney is a statutory or durable power of attorney, which is what most individuals think of when they think about a power of attorney. A durable power of attorney gives the agent permission to make important decisions – including accessing bank accounts and selling property – if the principal becomes incapacitated and is unable to make decisions on their own behalf. This type of power of attorney stays in effect until it is revoked or the principal dies. A general power of attorney takes the same action as a durable power of attorney, but the power expires automatically when the principal becomes incompetent.
What Are the Benefits of Having a Power of Attorney?
Although the need for a power of attorney may seem unnecessary now, life often changes quickly and unexpectedly. It is better to be prepared for when a person cannot act on their own behalf. This may be temporary – for instance, due to an illness – or it can be permanent. If a person does not have a power of attorney before they become unable to manage their personal or business affairs, it may be necessary for the court to appoint a guardian. When these court proceedings occur, the incapacitated person cannot choose who will act for them. Being proactive and creating a power of attorney document can avoid this potential issue.
Although the need for a power of attorney is often an unforeseen occurrence, it is better to contact an experienced Houston estate planning attorney so that you are prepared for what may lie ahead.
Do You Need a Power of Attorney Added to Your Estate Plan?
If you or a loved one would like to include a power of attorney as part of your Houston estate plan, contact the dedicated estate planning attorneys at McCulloch & Miller, PLLC. Our attorneys have decades of experience helping a diverse range of clients create and update their estate plans to meet their specific needs. A power of attorney is a critical element of an estate plan, and we are here to answer any questions you may have about the process. To speak to an experienced estate planning attorney about your situation, and to schedule a free consultation, call us today at 713-333-8900.