The Protections of a Power of Attorney (POA) to Avoid Guardianship

When a person becomes incapacitated and can no longer manage their affairs, someone must be appointed to step in. Without the proper legal documents in place prior to actually needing this assistance, families often face the lengthy and expensive process of seeking court-appointed guardianship. Fortunately, one simple tool can help avoid this: the mighty Power of Attorney (POA).

What is a Power of Attorney?

A Power of Attorney is a legal document that allows you (the “principal”) to appoint a trusted person (the “agent”) to make decisions on your behalf. There are two key types:

Durable Power of Attorney (Financial): Authorizes someone to handle your property and financial matters if you become incapacitated.

Medical Power of Attorney: Allows someone to make healthcare decisions for you when you cannot make them yourself.

Why is This Important?

Without a POA in place, your loved ones must petition a Texas court for guardianship to manage your finances or make medical decisions. This process can be:

Time-consuming: It can take weeks or months to be approved.
Costly: Court fees, attorney costs, and ongoing reporting add up.
Emotionally difficult: It may lead to family disputes or decisions made by a judge who doesn’t know you.

The loss of many of the rights and privileges that people take for granted, including the right to determine one’s own residence, vote, or enter into a contract can be put in jeopardy.

How to Avoid Guardianship

Planning ahead gives you control over your future and spares your loved ones from unnecessary legal burdens. It’s a simple but powerful way to maintain dignity and autonomy, even in life’s most uncertain moments.

Execute Powers of Attorney Early: These documents must be signed while you are still mentally competent – waiting too long can close this window of opportunity.

Set Up a Revocable Living Trust: A revocable living trust allows assets to be managed by a trustee without the need for court intervention.

Use Medical Directives: Advance directives like a Medical POA or Directive to Physicians ensure your healthcare wishes are respected without court involvement.

Keep Documents Up to Date: Review and update your documents regularly to reflect current preferences and contact info.

A Cautionary Tale

Katie was divorced, with one adult child living overseas. She owned a townhouse, a home in the country, and real property with oil and gas leases. Her financial accounts included 2 checking accounts, a savings account, and a brokerage account. After her divorce, Katie had made a simple will to dispose of her assets if something happened to her, but she had not updated the power of attorney she had executed during her marriage. When Katie was 60 years old, she was put in the hospital after suffering an aneurysm. Upon returning home, although Katie had problems with remembering things and found it more difficult to manage her affairs, she still had long periods where she was reasonably lucid. She subsequently suffered a stroke with an even longer stay in the hospital and a diminishment of speech, motor skills, and memory which were so severely compromised that she was substantially unable to take care of herself or manage her property.

While Katie showed foresight in executing her will, estate planning involves much more than just figuring out what to do with your property in the event of your death; making arrangements for the management of your assts or even your person in the event of incapacity can be just as important.

If Katie had kept her durable power of attorney up to date, she would have had someone to help her with the management of her financial affairs without having to go through the court to establish guardianship. With a medical power of attorney or advanced directive, she could have determined exactly who would make medical decisions on her behalf if she became unable to communicate her wishes for medical treatment or end of life decisions. Following the aneurysm she most likely still had the capacity to execute these legal documents, but with the additional stroke, that window closed and a court-appointed guardianship became the only feasible alternative.

A revocable living trust would also have been helpful in managing Katie’s assets without the need for guardianship. Even though revocable living trusts are often thought of as a tool for avoiding probate, they are also a valuable tool for managing assets in the event of incapacity. Provided she had properly funded the trust by retitling her assets, a successor trustee designated under the revocable living trust would have been able to step in and manage Katie’s assets after her stroke without the need for a court-imposed guardianship, thereby avoiding the nontrivial drain on her financial resources that would have come with a guardianship.

Contact McGarvey PLLC for your critical estate planning issues, including establishing a POA directive. We can also help guide you through guardianship. Visit our website for more information at mcgarveypllc.com or call us at 281.501.3030.