Power of attorney is an exceptional but often misunderstood estate planning tool. For example, many think that you must give your power of attorney to a lawyer—but this is untrue. Additionally, power of attorney does not automatically allow someone else to make medical decisions for you, and you do not relinquish your independence when you create one. Your power of attorney dies with you.
If you want to begin creating an estate plan, you probably have questions about the role of power of attorney. At The Law Offices of Kenneth W. Drake, Inc., I have counseled hundreds of clients in Woodland Hills, California, and throughout the San Fernando Valley, including Santa Barbara, Ventura, and Los Angeles counties about estate planning. I have also represented clients in estate planning litigation when disputes arise.
One way to avoid issues with your power of attorney and estate plan is to have them created by an experienced California attorney. Reach out to my office to get started.
California powers of attorney grant authority to an attorney-in-fact, or “agent,” to act on behalf of the person granting the authority, the “principal,” for lawful purposes, including authority for the principal’s property and personal care.
There are three types of powers of attorney:
A general power of attorney becomes effective upon execution by the principal. It allows the agent to act in the principal’s stead in matters involving the principal’s property and the principal’s personal care should they become unable to handle their own affairs due to incapacitation or lack of availability. It does not allow the agent to make healthcare decisions for the principal. That requires a living will or advance healthcare directive.
A durable power of attorney only goes into effect when the principal becomes incapacitated and unable to make decisions on their own. A durable power of attorney is conferred upon the agent, regardless of the incapacity of the principal. This means that when a principal becomes incapacitated, their authority rests with the agent appointed prior to incapacitation and no one can dispute or prohibit that authority.
A limited power of attorney sets forth specific matters that apply to the principal’s delegation of authority to the agent. A principal could, for example, limit the agent’s powers to the sale and transfer of specific real property while the principal is out of the country.
Power of attorney allows you to decide who you want to handle your affairs under certain circumstances or if you become unable to handle them on your own due to mental or physical incapacity.
If you do not have a power of attorney and you become incapacitated, the court will appoint someone to make decisions regarding your property and your personal care.
Having a power of attorney protects you if you become incapacitated. For example, imagine that you execute a durable power of attorney. You are in a car accident and are in a coma for a period of time. Your agent would be able to take care of essential activities such as paying your bills and maintaining your home. Once you regain consciousness and are able to do these things yourself, your agent’s authority is halted unless you become incapacitated again.
The legal qualifications for a power of attorney are only that they are ages 18 or older and have the capacity to act as your agent. Although states have different laws regarding powers of attorney, they recognize powers of attorneys executed in other states. Therefore, you could name someone who does not reside in the state in which you live to be your attorney-in-fact. That person would, however, need to travel to conduct certain matters on your behalf.
The major characteristic of your power of attorney should be trust. Your agent will be able to make all decisions in your stead, within the scope and limitations of your specific document. You should appoint someone in whom you have complete trust to care for you and your property if you no longer can.
Power of attorney is a powerful estate planning tool. It provides a layer of protection and peace of mind when you delegate your authority to someone you trust implicitly. If you are ready to talk about your estate plan and powers of attorney, call The Law Offices of Kenneth W. Drake, Inc. I serve clients in Woodland Hills, California, and throughout the San Fernando Valley. Set up an initial appointment today.