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Understanding Power of Attorney

On Behalf of | Mar 18, 2023 | Estate Planning |

As part of your Texas estate planning process, you may incorporate numerous legal documents into your portfolio. Most people sign a last will and testament, which might include naming an executor to administer your estate, as well as a list of assets and beneficiaries to whom ownership will transfer after your death. Many estate plans also include a document known as the Power of Attorney (POA).  

If you sign a POA, it means that you are granting another person or group the authority to act on your behalf if you are no longer able to do so for yourself. There are several things to keep in mind when signing a POA, as well as when you are deciding who you know that would best fulfill the role.  

A POA can be general or limited 

One of the benefits of estate planning is that you can customize your plan to fit your unique needs and goals. The documents that you include in your portfolio might be different than another estate owner’s. Moreover, two people might both have POAs in their estate plans, but the terms might be different.  

For instance, you might sign a general POA, which gives the acting agent authority to buy or sell real estate or sign contracts on your behalf, as well as manage other property affairs. You might have a friend who has a limited POA, which states detailed and specific instances wherein he or she may act in your stead.  

You can designate more than one person 

You might have one person in mind whom you would trust to make financial decisions on your behalf if you were to become incapacitated and another person whom you would prefer to make medical or health-related decisions. In such a case, you are free to grant each person a separate Power of Attorney.  

Also, you do not necessarily have to restrict a POA to become active only if you become incapacitated. It can be a useful tool if you are serving in the military and deployed overseas. You can grant someone authority to act on your behalf for matters at home while you are away. If you are a business owner, you might want to name someone as your acting representative.  

Always seek clarification before signing legal documents 

For any estate planning document to be valid, you must be of sound mind when you sign it. You must also sign it in compliance with state laws that govern such matters. To be sure that you understand the implications of initiating a Power of Attorney, last will and testament, revocable trust or other documents, it is best to seek guidance and support from someone who is knowledgeable about estate and probate issues.