Episode 05
Power of Attorney and Healthcare Directives, Explained
Families often assume being next of kin is enough. This page is about the gap between that and legal authority: two jobs, money and medical care, two different documents, and what happens when there’s neither, with Texas as the worked example and the source named on every rule.
Key points
- In Texas, money and medical care are separate documents: a durable power of attorney names an agent to act for you, and Texas’s statutory power of attorney form warns that it doesn’t authorize anyone to make medical and other health-care decisions. A medical power of attorney does that job. [F1, F5, F8]
- A power of attorney is for while you’re alive. In Texas, a durable power of attorney ends when the person dies, among other points, and the CFPB tells agents their authority ends at death. [F3, F4]
- Under the federal HIPAA privacy rule, a person with legal authority to make health care decisions for an adult is treated as that adult’s personal representative. A power of attorney that covers only money isn’t on the Department of Health and Human Services’ list of examples. [F12, F13]
- The Social Security Administration says a power of attorney or a joint bank account isn’t the same as being a representative payee and doesn’t give legal authority to manage someone’s Social Security or Supplemental Security Income payments. [F14]
- Without the documents: in Texas, a family list for consenting to medical treatment in certain settings, and for money, possibly a court. In Texas, you can name your own guardian in advance. [F11, F15, F19]
Episode notes
The question that started it
The episode started with a real question from a Reddit forum for people caring for aging parents, paraphrased here. A parent has severe dementia. There’s no will, no advance directive and no power of attorney. There’s money available, but the family can’t move it without a conservatorship or guardianship, and the lawyers they spoke to told them that could take as long as four to five months. That’s their lawyers’ estimate for their situation, not a general timeline. The post doesn’t name a state, and we won’t answer their case for them. So who’s allowed to decide?
Job one: money
Texas only · rules vary by state
In Texas, a durable power of attorney is a written document that names an agent to act for you, signed by you as an adult, with words saying it isn’t affected by your later disability or incapacity, or that it starts at that point. [F1] It also has to be acknowledged before a notary or a similar officer. [F1] Those words are what make it durable. [F1]
When an agent presents one, Texas generally requires the person asked to accept it, or within 10 business days to ask for the agent’s certification or a lawyer’s opinion, unless a legal ground for refusal exists. [F6] We didn’t cover what those grounds are.
Starting now or later
In Texas, some are written to start only at incapacity. [F1] For those, unless the document defines it differently, Texas treats you as incapacitated when a physician certifies in writing, after examining you, that you can’t manage your financial affairs. [F1, F2] That doesn’t mean every power of attorney needs a doctor’s letter. [F1, F2]
The agent’s duties
Whoever acts for you has duties. The CFPB, the Consumer Financial Protection Bureau, lists four for agents: [F7]
- Act only in the person’s best interest.
- Manage their money and property carefully.
- Keep it separate from your own.
- Keep good records.
It ends at death
A power of attorney is for while you’re alive. In Texas, a durable power of attorney ends when the person dies or revokes it, when the document says it ends or its purpose is done, when no agent is left to act, or when a permanent guardian of their estate qualifies. [F3] If the agent is a spouse, a divorce or annulment ends their authority, unless the document says otherwise. [F3] The CFPB tells agents the same thing about death: your authority ends, and even if you could easily pay some of their bills, you no longer have the authority to do it. [F4] After a death, it’s the estate’s process, which earlier episodes covered.
Job two: medical care
In Texas, medical care is a separate document. [F5, F8] Texas’s statutory power of attorney form for money even warns that it doesn’t authorize anyone to make medical and other health-care decisions for you. [F5] A medical power of attorney does that job. [F8]
Texas only · rules vary by state
In Texas, your agent can make the health care decisions you could make yourself, but only after your attending physician certifies in writing, in your medical record, that you’re incompetent. [F8] Treatment can’t be given or withheld if you object. [F8] And the agent decides based on what they know of your wishes, including religious and moral beliefs, or on their assessment of your best interests. [F8] It has to be signed in front of two qualified witnesses, at least one of whom meets extra independence rules, such as not being a relative or the agent, or signed and acknowledged before a notary. [F9]
The directive
Texas only · rules vary by state
Texas also has a directive, for your wishes in writing. [F10] In Texas, a competent adult can sign one at any time; the state’s form is called a Directive to Physicians and Family or Surrogates, and it’s signed with two qualified witnesses or before a notary. [F10] Texas law uses “advance directive” to cover a directive, an out-of-hospital do-not-resuscitate order and a medical power of attorney. [F10]
Medical records
Federal Under the federal HIPAA privacy rule, a health care provider or plan must treat a person with legal authority to make health care decisions for an adult as that adult’s personal representative, for the health information that goes with that role. [F12] That rule applies to covered providers, plans and clearinghouses. [F12] The Department of Health and Human Services lists examples: a health care power of attorney, a court-appointed guardian, or a general or durable power of attorney that includes health care decisions. [F13] A power of attorney that covers only money isn’t on that list. [F13]
What next of kin covers in Texas
Texas only · rules vary by state
Texas has a list for one situation. [F11] If an adult patient in a hospital or nursing home, served by a home and community support services agency, or held in a county or city jail can’t communicate, and has no legal guardian or medical power of attorney agent reasonably available, an adult surrogate who is reasonably available, willing and able to make decisions can consent to medical treatment for them, in this order: [F11]
- Spouse
- Adult children
- Parents
- Nearest living relative
That list is about consenting to medical treatment, in those settings. [F11]
Money is different: Social Security
Federal The Social Security Administration says having a power of attorney, being an authorized representative, or having a joint bank account with the beneficiary, is not the same as being a representative payee, and doesn’t give legal authority to manage their Social Security or Supplemental Security Income payments. [F14] To be a payee, a person has to apply and be appointed by Social Security. [F14]
With neither: guardianship
The CFPB explains that if a court decides you can’t manage your money by yourself, and you don’t have a power of attorney in place, it can name a guardian or conservator to manage your money and property. [F15] It adds that a court can name different people for financial and health care decisions, or give both roles to the same guardian. [F15]
Texas only · rules vary by state
In Texas, before appointing a guardian, the court must find, by clear and convincing evidence, that the person is incapacitated, that a guardian is in their best interest and will protect their rights or property, and that alternatives to guardianship, and available supports and services, were considered and found not feasible. [F17] Texas law’s list of alternatives includes a medical power of attorney, a durable power of attorney, a representative payee for public benefits, a joint bank account, a management trust and naming a guardian before the need arises. [F16] It’s a list in the law, not a recommendation.
Naming your own guardian in advance
Texas only · rules vary by state
In Texas, a person who isn’t incapacitated can sign a declaration naming who should serve as their guardian if they later become incapacitated, and the court must appoint that person ahead of others, unless they’re disqualified or wouldn’t serve the person’s best interests. [F19] The declaration can also rule out a named person. [F19]
Lighter tools for everyday help
For everyday help with bills, the CFPB describes a lighter tool. A convenience account, sometimes called an agency account, lets you name someone to help deposit, withdraw and write checks, without changing who owns the money or giving the helper the right to keep it when you die. [F20] The CFPB says that’s not the same as a joint account, where the money is jointly owned. [F20] Whether a bank offers one depends on the bank. [F20]
Back to the question
So who’s allowed to decide? With the right documents signed in time, the people you named: an agent for money, an agent for medical care. [F1, F8] Without them, in Texas, a family list for medical consent in certain settings, and for money, possibly a court. [F11, F15]
Three questions to talk through with your own family:
- Who handles the money?
- Who handles medical decisions?
- Are your documents signed the way your state requires?
For that last one, talk to a lawyer in your state. The CFPB also has free guides for agents, guardians, trustees and government fiduciaries; they’re listed in Sources. [F21]
Sources
- Texas Estates Code chapter 751 (§§751.0021, 751.00201, 751.131, 751.132, 751.201), Texas Legislature (Texas Constitution and Statutes)
- Texas Estates Code chapter 752 (§752.051, statutory durable power of attorney form), Texas Legislature (Texas Constitution and Statutes)
- Managing someone else’s money: Help for agents under a power of attorney (PDF), Consumer Financial Protection Bureau
- Texas Health and Safety Code chapter 166 (§§166.002, 166.003, 166.032, 166.033, 166.152, 166.154), Texas Legislature (Texas Constitution and Statutes)
- Texas Health and Safety Code chapter 313 (§313.004), Texas Legislature (Texas Constitution and Statutes)
- 45 CFR §164.502(g) (HIPAA Privacy Rule, personal representatives), Electronic Code of Federal Regulations (eCFR)
- Personal Representatives, U.S. Department of Health and Human Services
- FAQs for Beneficiaries Who Have a Representative Payee, Social Security Administration
- Considering a financial caregiver? Know your options (PDF), Consumer Financial Protection Bureau
- Texas Estates Code chapter 1002 (§1002.0015), Texas Legislature (Texas Constitution and Statutes)
- Texas Estates Code chapter 1101 (§1101.101), Texas Legislature (Texas Constitution and Statutes)
- Texas Estates Code chapter 1104 (§1104.202), Texas Legislature (Texas Constitution and Statutes)
- Managing someone else’s money, Consumer Financial Protection Bureau