Granting someone power of attorney is an inalienable right in Texas. While giving someone medical and financial powers of attorney over you involves creating complex documents, it is essential in ensuring your best interests remain intact as you enter old age.
Financial power of attorney gives someone else the right to make financial decisions on your behalf. This allows someone else to pay bills, pay the mortgage and take care of other essential expenses when the person would otherwise be unable to do so, or if she or he would forget to pay. It is a huge responsibility, and the law has strict guidelines about how powers of attorney can spend money. This is why it is so critical to take careful notes about where all the money goes. That way, if a court ever asks where a person’s money went, you can show it.
There are four fundamental properties to being a lawful and successful power of attorney. These properties include:
- Exercising all powers to be within the benefit of the principal party
- Separating the financial accounts of the principal with the power of attorney
- Exercising reasonable prudence and caution with all expenses
- Maintaining an accurate and full record of all disbursements, receipts and actions
Therefore, all powers of attorney need to keep track of how much money went toward an item, what exactly the item was and how that item benefits the principal party. The reason why such harsh laws exist for powers of attorney is to deter anyone from taking advantage of her or his position. Some people will purchase gifts for themselves that did not receive authorization from the principal party. Other people will pay themselves far more than necessary for their services. All powers of attorney should maintain a file of everything spent on behalf of the person. That way, if anything ever comes into question, the power of attorney can support any claims with physical evidence.