If you have not executed both a Medical Power of Attorney and a general power of attorney (called a Statutory Durable Power of Attorney), I encourage you to have them prepared. Or, if you already have both general and medical powers of attorney, but either of them name only one agent (for example, your spouse) and not a successor, you should consider executing a power to appoint one or more successors to act in the event your first appointed agent is unable to act on your behalf, for instance if he or she is in an accident with you.
A Medical Power of Attorney is the only way to assure that the person you would want to make medical decisions on your behalf in the event of your disability by injury or illness has the authority to do so. Even if you have a revocable living trust, your successor trustee has no authority to make health care decisions on your behalf. Medical powers of attorney are discussed in more length below.
Without a general power of attorney (discussed below), a relative might have to go to court to have a guardian appointed to handle your financial affairs if you become disabled. Proceedings for guardianship of the estate are very time consuming and expensive. Your will has no legal effect until after you have died. Therefore, the person you appointed to act as executor of your estate has no legal authority to act on your behalf until after your death. The trustee of any trust of which you may be a beneficiary, including a revocable living trust, would have no authority to act with respect to assets that are not in the trust, for example your homestead, automobile and bank accounts, if you have not transferred title to the trust.
Powers of Attorney – An overview
The word “attorney” comes from the Latin word tornare, meaning “to turn in a lathe”. An attorney is one who takes the turn or place of another. An attorney is simply an agent, a person appointed by another. An attorney-at-law, or lawyer, is an agent to represent another at law, i.e. in court. An attorney-in-fact is one appointed to take the place of another in any matter for which he is so appointed, other than in court. The legal document which sets forth the authority of one person (the attorney-in-fact, or agent) to take the turn of another person (the principal) is called a “power of attorney.” Powers of attorney may be general or limited. A “general power of attorney” gives the attorney-in-fact the power to act in the principal’s place and stead in all matters. A “limited power of attorney”, also called a “special power of attorney,” limits the attorney’s authority to the expressed facts.
The signing of any power of attorney does not terminate the principal’s authority to act on his own behalf. A principal may revoke any power of attorney at any time.
Under the common law of agency, that is, the general rules governing the relationships of principals and agents, the appointment of an agent terminates upon the death or incapacity of the principal. However, under the statutes of Texas, a power of attorney may be made to survive the disability (but not the death) of the principal by express provision in the instrument. A power of attorney which endures the disability of the principal is called a durable power of attorney.
Medical Powers of Attorney
The laws of Texas allow adults to delegate to an agent of their choice the authority to make medical decisions for them in the event of their disability. The legal document creating the authority of the agent is called a Medical Power of Attorney. Your health care agent’s authority begins only when your doctor certifies that you lack the capacity to make health care decisions for yourself. A Medical Power of Attorney may be used whether the disability is very short (for example, unconsciousness after an accident) or longer term, as in the case of senility.
With a Medical Power of Attorney your appointed health care agent will have authority to make decisions concerning any treatment, service, or procedure to maintain, diagnose, or treat your physical or mental condition, including the authority to consent, refuse to consent, or withdraw consent to medical treatment and may make decisions about withdrawing or withholding life-sustaining treatment on your behalf. The Medical Power of Attorney is not the same as a directive to physician (the so-called “living will”) to withhold or withdraw artificial life-sustaining treatment in the event of an irreversible terminal condition. With a living will, you direct the physician who may happen to be “attending” you at the time you have an “incurable or irreversible and terminal condition,” as determined by two physicians, to withhold life-sustaining procedures when the attending physician determines that your “death is imminent or will result within a relatively short time without application of life-sustaining procedures.” Neither you nor anyone else (without a Medical Power of Attorney) can revoke a living will if you become physically unable to communicate your desire to revoke. To the contrary, the agent you appoint in your Medical Power of Attorney, not a physician, can determine whether, and which, procedures should be withheld or withdrawn in light of the actual facts at that time.
Medical Powers of Attorney are revocable. However, if you wish to make any changes to a Medical Power of Attorney, you must make an entirely new one (rather than just interlineate an existing document).
Statutory Durable Powers of Attorney
The form of the Statutory Durable Power of Attorney is that of a “general” power of attorney, unless the principal expressly limits the powers granted in the form. The form gives the agent the authority to act on behalf of the principal in all of the following types of matters: real property transactions; tangible personal property transactions; stock and bond transactions; commodity and option transactions; banking and other financial institution transactions; business operating transactions; insurance and annuity transactions; estate, trust, and other beneficiary transactions; claims and litigation; personal and family maintenance; benefits from social security, Medicare, Medicaid, or other governmental programs or civil or military service; retirement plan transactions; and tax matters.
Unlike the Medical Power of Attorney, the power of attorney can be effective both before and after your disability. Unless you indicate that it will become effective only after your disability, after you sign a Statutory Durable Power of Attorney, both you and your agent would have the legal authority to act on your behalf. You should appoint someone you trust with everything you have.
Your agent has the legal duty to keep records and to inform you of all actions taken under the power. Misappropriation of property under a power of attorney is a criminal offense.
If you want to name more than one person as general agent with immediate powers (rather than with successive powers after the first appointee ceases to serve), I recommend the use of more than one power of attorney. For example, you may want to give your spouse general powers to handle financial matters upon your disability, but also name an adult child, or business associate, so that he or she can handle business matters if you are unable or unavailable.
If you executed a durable power of attorney before the current statutory form was promulgated, and it was in compliance with the law in effect at that time, it is still legally valid. However, I suggest that you consider preparing a new power of attorney. Some banks and other institutions that the agent may have to deal with may not accept powers of attorney other than the current statutory form. A power of attorney is effective only if third parties accept it.
Neither Statutory Durable Powers of Attorney nor Medical Powers of Attorney currently need to be filed in the public records genrally. However, title companies will require the original of the Statutory Durable Power of Attorney to be filed before closing a real estate transaction using it.
Conclusion
Statistically, each of us is much more likely to be disabled in the next few years than to die. Many are disabled at some point during their lives. Estate planning, then, should include planning not only for the certainty of death, but also for the possibility of disability. Powers of attorney, both Statutory Durable Powers of Attorney and Medical Powers of Attorney, are essential elements of an estate plan. I recommend that you name at least one alternate agent in the event your first named agent is unable to make decisions on your behalf.
I shall be pleased to answer any questions you may have concerning these matters. You may contact me by telephone at (254) 829-0064 or write to me at P. O. Box 693, Elm Mott, TX 76640.