What are important legal documents to have in place?
You may know how important it is to have your estate plan in order. Just as important are the legal documents used to help manage your finances and advance directives to assist with important health care decisions if you are unable to make decisions on your own.
A power of attorney (POA) can be a vital tool for someone you trust to handle bills and banking if you struggle to keep up with these day-to-day activities or if you have diminished capacity. There are different types, but their general purpose allows you, the “principal,” to appoint someone else, the “agent,” to act on your behalf. Most POAs give your agent the authority to sign your name on checks and other documents and buy or sell real estate, for example. A POA is “durable” if it remains in effect even if you become incapacitated.
Without a POA in place, if you become incapacitated, there may be a need for an expensive, court-administered guardianship. Unquestionably, you should name people you trust implicitly. You should also name people who will not have difficulty managing your finances.
Name one, and if possible, two or more alternate agents who can take over if your agent becomes unable to continue.
In a medical power of attorney, you may appoint an agent and alternate agents to make health care decisions on your behalf. This document takes effect only when you are unable to make decisions for yourself. Until that point, you retain control of your own medical treatment.
When deciding on an agent and alternates, you should consider who is best suited to assist you in this manner—they may be the same people you name as POA agents, or they may be different.
An authorization to release health information under HIPAA, a federal law, gives doctors and hospitals permission to disclose your private medical information to the people you list on the document. Often, the agents on your medical power of attorney are named on this authorization.
The directive to physicians, family, or surrogates, sometimes called a “living will,” is where you specify in writing whether or not you want life-sustaining treatment withheld if you are unable to communicate your wishes when such treatment is needed. It applies when you have a terminal condition, defined as having less than six months to live, or an irreversible condition, meaning a condition for which there is no cure.
The directive takes effect only when you are unable to communicate your wishes. Under Texas law, you must give all attending doctors notice of your written directive. The directive is not the same as a Do-Not-Resuscitate order (see https://www.wrightabshire.com/publications/ living-wills-do-not-resuscitate-orders-differ/).
A guardian is someone appointed by a court who is responsible for maintaining the estate and/or the wellbeing of an incapacitated person. A declaration of guardian before the need arises is a document where you can appoint someone for one or both of these purposes ahead of time, should a guardianship become necessary. You can also disqualify specific individuals from being appointed as your guardian.
Last, you may appoint an agent who, if they agree in writing, must follow your written wishes regarding funeral, cremation, burial arrangements. You would appoint an agent in a designation of agent to control the disposition of remains. (See also https://www.wrightabshire.com/publications/ who-makes-decisionsabout-a-loved-ones-remains-after-death/.)
Not only is it important to have powers of attorney and advance directives in place, but it is crucial to carefully consider the people you appoint and for those people to understand their obligations.
Visit the website at www.wrightabshire.com . Nothing contained in this publication should be considered as the rendering of legal advice to any person’s specific case but should be considered general info.