To create and execute a Durable Power of Attorney (DPOA), you must be “competent,” also referred to as “of sound mind.” That means you must have the mental capacity to understand the benefits, risks and effect of signing the document. You can easily revoke your DPOA as long as you are of sound mind, but doing so after a question of competence has arisen is not as easy, so your understanding of the meaning and effect of the document before signing is vitally important.

What is a durable power of attorney? 

A power of attorney is a legal document that lets you (the “principal”) appoint someone (the “agent”) to act on your behalf in financial matters. A separate document, a Medical Power of Attorney (“MPOA”) is needed to designate an agent for medical decisions. A durable power of attorney (DPOA) remains in effect even after you become incapacitated, letting your agent continue to handle your affairs when you cannot. This is enormously helpful for the family if a person becomes unable to handle their own affairs.

Who decides if a person is “competent” to sign a DPOA? 

It is common for children or caregivers to disagree over whether the signer was competent when signing. These disputes can lead to lasting hostility between family members, and occasionally to court cases. So who determines whether a person is “competent” when signing the form?

Generally, the attorney representing a principal in the drafting of a DPOA for financial management typically completes a minimum determination of the mental capacity of the client to the extent the attorney can ascertain that the principal understands the purpose, uses, and risks of the DPOA.

Sometimes, however, you can predict that someone might want to challenge the DPOA after you become incapacitated. For instance, if your children don’t get along, or already disagree about your care and finances, they will probably continue after you become incapacitated. If you think this is likely, choosing to hire an attorney to help draft and execute your DPOA may be very helpful. Typically, a lawyer will go over your particular situation, help you decide what options to take, and if necessary, testify as to your capacity later on.

Other safeguards and preventative measures: include signing in front of witnesses, then having them sign statements that you appeared competent; getting a doctor’s written, dated opinion that you are of sound mind; and making a video of a statement of intent to create a DPOA. Keep any of these items with the original DPOA itself in a safe place.

Generally,a person is mentally competent as long as they can understand the rights, responsibilities, risks, or benefits involved in decisions, and the potential consequences of what they decide. Having a mental or physical disorder does not automatically mean a person is incapacitated; there must be a specific inability to understand and make decisions.

Some of these standards include:

• Ability to understand and appreciate quantities.
• Ability to plan, organize, and carry out actions in one’s own rational self-interest.
• Ability to reason logically
• Level of arousal or consciousness.
• Orientation to time, place, person, and situation.
• Ability to attend and concentrate.
• Short- and long-term memory, including immediate recall.
• Ability to understand or communicate with others, either verbally or otherwise.
• Recognition of familiar objects and familiar persons.

What if you think a loved one was not competent when the DPOA was signed? 

Sometimes, after a parent becomes incapacitated, a child or caregiver presents a new DPOA signed by a parent without the rest of the family’s knowledge. The family may be concerned that the parent was unable to understand the document, or was even tricked or coerced.

If this happens in your family, you may be able to challenge the document through a legal proceeding. To make a determination, a judge may question those who knew the person at the time, using the criteria listed above.

If the judge decides the person did not have the capacity to make the DPOA, the most recent prior DPOA will be effective. If there is no DPOA, you may need to set up a formal guardianship; however, generally Texas law prefers that other less restrictive methods are employed before authorizing a guardianship.

However, if the person indeed had the capacity to execute the DPOA at the time, the DPOA is valid. Even if you think the person made a bad choice, if they had capacity, it is the principal’schoice, and remains in effect.

If you are interested in learning more about a Durable Power of Attorney, Weldy Law, PLLC is here to help and welcomes you to schedule a consultation

The above blog is intended for informational purposes only and should not in anyway be considered legal advice.