When starting to get their “affairs in order”, most people think about wills, and maybe even a trust. What is often overlooked when considering estate planning is the role that both Medical and Financial Power of Attorney documents play within the plan. Power of Attorney documents are effective during your lifetime and cease to have authority upon your passing.
The powers granted in these documents terminate upon your death.
The Medical Power of Attorney document is critical to proactive estate planning. At Crain & Wooley, we not only include the 2018 Texas statutory requirements but also incorporate three necessary components.
- Appointing individual(s) to be your “Agent” that legally allows them to assist in making medical decisions in the event of your incapacity
- Your preferences if you reach an irreversible or terminal condition, often referred to as a living will or advanced directive
- The HIPAA release language that allows your appointed “Agent” to consult with your doctors and physicians to discuss medical conditions and treatments on your behalf.
By simply completing this document and having it apart of your estate plan, you can save yourself, family, and friends from facing additional hardships if you find yourself facing serious medical conditions. We recommend completing a Medical Power of Attorney with the rest of your estate plan when you have the requisite mental capacity so that you and your intentions are properly documented.
The Financial Power of Attorney is another useful and necessary document to execute when updating or creating your estate plan. Like the Medical Power of Attorney, you appoint an “Agent” that can act on your behalf if you were unavailable or mentally incapacitated. Your Agent would be able to access your bank accounts and other assets to continue paying bills and other expenses so that your estate does not get behind when you are unavailable to manage day-to-day affairs.
We recommend utilizing a Financial Power of Attorney, as opposed to adding a joint owner or co-signor on a bank account. This avoids unwanted liability exposure.
Your Agent acting through your Financial Power of Attorney can also use this legal document to qualify you for Medicaid if needed. Your Agent could perform a Medicaid spend-down of your estate in the event of your incapacity, which allows you to qualify for the state’s Medicaid benefits to cover medical expenses – like long term care. Having a Financial Power of Attorney in place will alleviate issues of frozen accounts and unpaid expenses if you are mentally or physically unable to sign documents or manage your affairs.