Quick answer: If illness, an accident, or cognitive decline leaves you unable to act, your children may need more than a will. Your family may need legal authority to manage your finances and medical care, someone authorized to care for minor children, access to funds, and practical information about how your household works.
Knowing what you would want is not the same as having authority to carry it out.
That is why a complete Texas estate plan should address incapacity as carefully as death.
Incapacity Can Create Two Different Problems
If a parent becomes incapacitated, the family may suddenly face two sets of responsibilities.
First, someone may need to handle the parent’s affairs:
- pay bills;
- manage financial accounts;
- communicate with insurers;
- deal with property;
- obtain medical information;
- make health-care decisions when legally authorized.
Second, if minor children are involved, someone may need to handle the children’s immediate needs:
- provide a safe place to stay;
- take them to school;
- communicate with teachers;
- obtain medical treatment;
- manage daily routines;
- pay their expenses.
One document usually does not solve both problems.
Your Children Need Someone Who Can Care for Them
Suppose both parents are seriously injured in an automobile accident.
A grandparent, aunt, uncle, or close family friend may immediately step in.
That person may be the obvious caregiver.
But schools, doctors, insurers, and other institutions may still ask:
“What authority do you have to act for this child?”
Texas Family Code Chapter 34 permits an authorization agreement for a nonparent adult caregiver in circumstances covered by the statute. Such an agreement can authorize specified activities involving education, medical care, benefits, insurance, and other matters.
The important planning question is not simply:
“Who would take the children?”
It is:
“Would that person have the authority and information necessary to take care of them?”
Parents should identify:
- the first-choice caregiver;
- at least one backup;
- where the children would stay;
- who may handle medical and educational matters;
- how the caregiver could obtain funds for expenses;
- where important information is located.
And the proposed caregiver should know about the plan before an emergency occurs.
Your Children May Need a Guardian Nomination
Temporary caregiving and long-term guardianship are different issues.
If a court ultimately needs to appoint a guardian for a minor child, Texas law gives significance to a parent’s written selection, although the proposed guardian must still be legally eligible to serve. Texas Estates Code Chapter 1104 governs selection and eligibility of guardians.
Parents should usually name more than one choice.
The first person selected today might later:
- become ill;
- die;
- move far away;
- develop family problems;
- become unable or unwilling to serve.
A backup is part of a complete plan.
Someone Must Also Be Able to Manage the Money
Finding the right person to care for the children is only part of the problem.
Someone also needs the ability to keep the financial side of the household functioning.
A Texas durable power of attorney can give a trusted agent authority over financial and property matters granted in the document. Texas Estates Code Chapters 751 and 752 govern durable powers of attorney and the statutory form.
Depending on the authority granted, the agent may need to:
- pay the mortgage or rent;
- keep utilities current;
- maintain insurance;
- manage bank accounts;
- address taxes;
- handle real estate;
- deal with employers or benefit providers;
- provide money for the children’s care.
This financial agent does not have to be the same person who physically cares for the children.
Sometimes separating those roles is a good idea.
But if two people are involved, the plan should make their responsibilities clear enough that they can work together instead of fighting over authority.
Someone May Need Authority to Make Medical Decisions for You
Your children may also be affected by decisions concerning your own medical treatment.
A Texas Medical Power of Attorney allows you to designate an agent to make health-care decisions when the statutory conditions for the agent’s authority are met. Texas Health and Safety Code Chapter 166 governs medical powers of attorney and other advance directives.
Choose someone who can:
- communicate effectively with physicians;
- understand difficult medical information;
- stay composed in a crisis;
- respect your values;
- make decisions based on what you would want.
Related incapacity documents may include:
- HIPAA authorization;
- Directive to Physicians;
- declaration regarding your own guardian;
- medical-history and medication information.
Your Children Need Access to Money for Their Care
A practical plan should also answer:
Where does the money come from?
A caregiver may be willing to take responsibility for the children but still need funds for:
- food;
- housing;
- school expenses;
- medical expenses;
- transportation;
- activities;
- child care;
- special educational or medical needs.
The estate plan should coordinate who controls the money with who is caring for the children.
For some families, that may involve an agent acting under a durable power of attorney during the parent’s incapacity.
For longer-term planning after death, trusts may be used so that a responsible trustee manages property for children rather than minors receiving property outright.
Your Children Need Practical Information Too
Legal documents solve only part of the problem.
The person stepping into your role may also need information such as:
- children’s full legal names and dates of birth;
- school or daycare information;
- doctors, dentists, therapists, and pharmacies;
- medications and allergies;
- health-insurance information;
- emergency contacts;
- daily routines;
- information about pets;
- location of estate-planning documents;
- attorney, financial-adviser, and insurance contacts.
Your current article makes an especially important point here: legal authority is not enough if the person stepping in does not know how the family actually functions.
Do not place passwords in an unsecured family-information sheet.
Instead, the appropriate person should know how to obtain access through your secure password-management system when necessary.
Your Family Must Be Able to Find the Documents
A beautifully drafted power of attorney is of little help if no one knows it exists.
The appropriate people should know:
- that they have been named;
- what role they may be asked to perform;
- where important documents are kept;
- whom to contact for legal help;
- who else has been given responsibilities.
That does not mean everyone needs unrestricted access to every document.
It means the plan should be usable in an emergency.
What About Your Adult Children?
Once a child becomes an adult, parents generally should not assume they automatically retain the same decision-making authority they had when the child was a minor.
A young adult can create his or her own incapacity documents, which may include:
- Medical Power of Attorney;
- HIPAA authorization;
- durable power of attorney;
- Directive to Physicians;
- guardian declaration.
This can be especially worth discussing with college students and young adults who remain financially dependent on their parents.
The point is not to deprive the adult child of independence.
It is to let the adult child decide who should be able to help if an emergency occurs.
Children With Disabilities May Need Different Planning
An adult child with a disability may require a more individualized plan.
Some adults can execute powers of attorney and make their own decisions with appropriate assistance.
Texas also recognizes supported decision-making agreements as an alternative that may help some adults with disabilities make their own choices without a full guardianship. The Supported Decision-Making Agreement Act is contained in Estates Code Chapter 1357.
Other situations may require different arrangements.
Inheritance planning matters too.
If a beneficiary receives means-tested public benefits, leaving property outright can create eligibility concerns. A properly drafted special needs trust may be appropriate depending on the circumstances.
This deserves its own detailed analysis rather than being treated as a routine provision in every estate plan.
A Will Is Not Enough for Incapacity
A will primarily addresses what happens after death.
It generally does not provide the authority needed to manage your affairs while you are alive but unable to act.
Depending on the family, an incapacity plan may include:
- durable power of attorney;
- Medical Power of Attorney;
- HIPAA authorization;
- Directive to Physicians;
- guardian declarations;
- caregiver authorization for minor children;
- trust provisions;
- organized family instructions.
The names and responsibilities in those documents should be coordinated.
Five Questions Parents Should Answer
Before assuming your family could simply “figure it out,” ask:
- Who would care for my children immediately?
- Would that person have authority to deal with their school and medical needs?
- Who could manage my money and keep household expenses paid?
- Who could make medical decisions for me?
- Would everyone involved know where to find the information and documents they need?
If any of those answers is unclear, there is a gap in the plan.
The Better Question
The question is not simply:
“Who would take care of my children if I died?”
It is:
“If I were alive but unable to come home tonight, would the people I trust know what to do and have the legal authority and information to do it?”
That is what incapacity planning is supposed to solve.
Ready to Review Your Family’s Incapacity Plan?
If you want to make sure the right people could handle medical decisions, finances, caregiving responsibilities, and family information if you became incapacitated, you can schedule a private consultation.
If you would rather begin by organizing the information your family might someday need, the Texas Probate Risk Workbook can help identify gaps to review.