Sooner or later, most of us will want someone else to handle the bills. It is tempting to think that we can just download something off the Internet use the basic form created by the Texas State Legislature and be done with it.
Nothing could be further from the truth.
Who you pick as your agent
Who. The most important part of your Power of Attorney may well be who you pick as your agent and how you hold them accountable. You agent has a fiduciary duty: like Fido he must put your interests first. You may think that your child or sibling or spouse will do that. But an estimated 70% of elder fraud and exploitation is committed by family members, many of them using a Power of Attorney.
To keep your agent on their toes, your Power of Attorney should include a requirement that they keep receipts and accounts and deliver them, 10 days after receiving a request, to the people you name.
In case they need to be replaced, it should be accompanied by a Declaration of Guardian in Case of Need. A Power of Attorney remains in effect with regard to third parties until they have actual notice that it has been revoked. Once appointed by the Court, a guardian can displace any agent under a Power of Attorney and take control of all your accounts. There is no question of whether the automotive dealer or some other third party had actual notice that the Power of Attorney was revoked.
What will your agent do
What. What your agent should be able to do under your Power of Attorney depends on what you have and what needs to be done. If you do not trade commodities and futures, your agent should not be able to do so. If you may need Medicaid, your power of attorney should provide for Medicaid planning. If you want your pets taken care of, your mail picked up, people hired to help you, your power of attorney should let your agent do this. If you want your agent to make gifts, your Medical Power of Attorney should have an independent agent make any gifts to the agent. It should also require adherence with Medicaid planning, not just the $14,000 IRS gift tax exemption. Otherwise, you could be penalized and denied Medicaid for a period – and not have the money to pay for your care.
When will your Power of Attorney become effective
When. Some people would like their Power of Attorney to become effective immediately, either because they want to see how their agent acts while they can still step in or because the point at which they will need help cannot be predicted with much certainty. Others want to stay in charge until a doctor certifies that they lack mental competency to handle their finances.
Where will your Power of Attorney be effective
Where. You may want a different Power of Attorney to deal with your home, out-of-state property or handle your affairs while you are travelling.
How will your Power of Attorney work
How. Discuss your situation with an elder law attorney. Sign a Power of Attorney which works for you.
Terry Garrett is a member of the National Academy of Elder Law Attorneys and is active in the Texas and Austin Bar Associations. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.
She assists families of people with special needs, people planning for the retirement years and people administering estates.