Power of Attorney
Effective estate planning requires careful authorization designation and facilitating the required documentation to ensure proper implementation.
There are numerous types of power of attorney documents that could be classified as general, limited, or durable. More importantly, each has its particular function for each specific estate planning need and language included in the document.
What is a Power of Attorney (POA)?
Generally, a Power of Attorney is a legal authorization that designates a specific person or entity to be their agent. This agent then has the power to make decisions on behalf of the designating person's or entity's property, finances, medical care, or well-being.
The authority provided by the Power of Attorney can be broad or limited, as the documentation's scope largely depends on the language of the document. Moreover, whether the power imposed on the agent is general or durable is dependent on the type of power of attorney.
A general power of attorney is a designation that ends when a designating person becomes incapacitated. While a durable power of attorney provides the agent continuous authority even when the designating person is physically or mentally incapacitated.
Some common types of durable power of attorney helpful in estate planning are:
Power of Attorney for Financial Matters
This legal document designates an agent the ability to manage a designating person's
or entity's financial and property matters. In effect, the agent can act on behalf of the person to handle and make necessary decisions regarding the designating person's or entity's financial and property assets. You should consider a POA for Financial as a part of any overall Retirement Planning or Insurance Strategy.
In Texas, a valid power of attorney for financial matters must be signed before a
notary.
Similarly, in Louisiana, a power of attorney pertaining to financial matters must be
signed before a notary to be considered valid.
Power of Attorney for Healthcare
This legal document provides an agent to make all necessary healthcare decisions for
the designating person in the unfortunate event that they become physically or mentally incapacitated to make those decisions on their own.
In Texas, a valid medical power of attorney requires that the document either be signed by the designating person and two witnesses; or signed by the designating person in the presence of a notary public.
In Louisiana, medical power of attorney must be signed and notarized to be considered valid.
Advance Directive or a Living Will
Generally, an advance directive is a legal document that outlines the designating
person's wishes about their future medical care.
Not to be confused with a Power of Attorney for healthcare, which refers to the broad medical treatment and care, an advance directive only applies to the wishes of the designating person in regards to "life-sustaining treatment" in the severe event of terminal illness or irreversible condition. Some of the conditions included in a living will include: do not resuscitate directives, organ and tissue donations, dialysis, or ventilation.
In Texas, a living will is required to be signed by witnesses or notarized in order to be
valid.
In Louisiana, a living will simply be signed in the presence of two witnesses and
does not have to be notarized to be valid.
Check with your state law's requirements to know what must be included in the document and how to execute a valid power of attorney.
Power of Attorney, like a Will, is important to any estate plan. Check out our comprehensive Estate Planning Guide here.