What is a California Durable Power of Attorney?
Power of Attorney definition:
A California Durable Power of Attorney is a document that authorizes your agent (a person you choose) to manage your financial affairs if you become unable (or unwilling) to manage them yourself.
This is similar to a healthcare power of attorney, however, it only relates to financial decisions and does not have any control over healthcare decisions.
Selecting your California Durable Power of Attorney Agent
When you sign a general power of attorney, you authorize someone to manage financial matters on your behalf in the event that you are unable to do so yourself. That’s a lot of responsibility to sign over to someone. You need to pick someone who is trustworthy, someone who will act in your best interests. But you also want to choose someone to can handle the responsibility of managing the assets you’ve accumulated during your life. You wouldn’t ask your 20-year-old child to run your crop-dusting business, would you?
As you discuss your choice with your family, refer back to our estate planning checklist to make sure you cover all your bases and will avoid probate.
California Power of Attorney FAQ's
The timing of a Power of Attorney’s effect depends on the type. A general or durable POA usually takes effect immediately after signing. A springing POA only takes effect under specified conditions, such as when the principal becomes incapacitated, and typically requires a doctor’s certification.
If you don’t have a Power of Attorney and become incapacitated, your family may need to go to court to appoint a conservator to manage your affairs. This can be costly and time-consuming. A POA is a simple way to avoid court involvement and ensure your wishes are followed.
A California Durable Power of Attorney allows you to grant powers over a variety of matters, including (but not limited to):
- Managing bank accounts
- Buying or selling real estate
- Paying bills
- Filing taxes
- Making healthcare decisions (with a Healthcare Power of Attorney) You can customize the powers granted in the document based on your needs.
Yes, you can revoke or change your Power of Attorney at any time, as long as you are mentally competent. To do so, you must notify your agent in writing and destroy the original POA document. It’s also wise to inform any third parties, such as banks or healthcare providers, who may rely on the POA.
To create a valid California Power of Attorney, the document must be signed by the principal in front of a notary public or two witnesses. For healthcare decisions, California law requires specific forms to be used, including the Advance Health Care Directive.
In California, the most common types of Power of Attorney include:
- General Power of Attorney: Grants broad authority over legal and financial matters.
- Durable Power of Attorney: Remains in effect even if the principal becomes incapacitated.
- Limited (Special) Power of Attorney: Grants specific authority for a limited period or task.
- Healthcare Power of Attorney: Allows an agent to make medical decisions if the principal cannot.
- Springing Power of Attorney: Becomes effective upon a specific event, like incapacitation.
A California Power of Attorney (POA) is a legal document that allows an individual (the “principal”) to appoint someone else (the “agent” or “attorney-in-fact”) to make financial, legal, or healthcare decisions on their behalf. Depending on the type of POA, the agent may have authority immediately or only when the principal becomes incapacitated.
Who will best be able to handle the responsibility?
- who is local?
- Who do you trust with your finances?
- Who will be caring for you physically?
- Who is best suited to the required tasks?
- Who will be alive when they are needed?
- Who could act as an alternate if needed?
SOME FAMILY CONSIDERATIONS WHEN CHOOSING A CALIFORNIA DURABLE POWER OF ATTORNEY AGENT
Obviously, you need to appoint someone you trust. Typically, the first person you turn to is your spouse.
This is a great choice as the primary power of attorney agent in most situations, but what if your spouse can’t do it?
Most often, people choose another family member, like a child or a sibling. But before you just assign the duties to your oldest child, consider whether that child has the knowledge and experience necessary to manage your affairs. Dealing with financial decisions is not easy. Is a graphic designer the best choice to manage a farm operation? Would you trust your nest egg to a college senior? It’s smart to choose someone you’d trust with your checkbook to keep your assets out of the probate court.
Let’s be Practical.
In the grand scheme of things, convenience is going to play a major role in deciding who should act as your power of attorney. On one hand, it might make your five children feel good to all be appointed together as your agent.
On the other hand, is it wise to make the child who lives in the same town as you call her older sisters who live in Century City, Cleveland, and Beijing every time she needs to make a decision? Consider whether the better option is to appoint one child or sibling as the primary agent and appoint the others as alternates.
By law, a power of attorney (POA) ceases to be valid when the concerned individual is incapacitated. However, in most cases, this law nullifies the purpose of having a power of attorney in place, and for the same reason, the POA must be explicitly stated as “durable”.
A durable power of attorney remains in effect even after you are mentally incapable of making your own healthcare or financial decision. We recommend having both a durable power of attorney for health care and a durable financial power of attorney to ensure optimal management of your health as well as your assets. If you are not sure what you need, try taking our estate planning quiz.
Drafting a valid California Durable Power of Attorney Avoids ambiguity
Life can turn on a dime and drastic changes can occur overnight in anyone’s life. If you have a California durable power of attorney in place, potential squabbles over your finances, as well as health care matters, can be resolved easily. All that you need is a reliable estate planning attorney to draft your durable POA document as part of your comprehensive estate plan.
A California Durable Power of Attorney is Designed to Protect the Assets of the Principal
When a patient is forced to move into nursing care for health reasons, the assets of the individual can be best protected through a durable power of attorney. Ignoring the need for a durable POA can result in your property being subjected to nursing home care payments.
Make important decisions along with the California durable power of attorney agent
A California durable power of attorney gives you the incredible opportunity to make the most important decisions regarding financial and medical matters prior to incapacity. While this may sound simple, remember that without a durable POA, the court will appoint a guardian to handle all your affairs (which is a more expensive option and takes a lot of time to be executed too).
6-Steps to Cancel a California Durable Financial Power of Attorney
Canceling a California durable power of attorney is pretty straightforward. Still, it needs to be done properly with careful planning so that it cannot be disputed in the future. The best possible outcome is that the principal, who granted the power to the attorney-in-fact to act in their name, effectively cancels it.
But if the principal does not revoke the power of attorney prior to becoming incapacitated, then revoking a power of attorney would require probate court proceedings.
If the principal dies, however, the POA is automatically revoked. Here are the steps to revoke the California financial power of attorney:
- A written document must be drafted invalidating the current power of attorney. We recommend hiring an attorney for this process as they are well-experienced and would ensure that the revocation document is valid.
- According to California law, the revocation must follow the requirements shown on the original power of attorney. Check the original document to make sure that all the requirements are fulfilled.
- Sign the document in the presence of a notary.
- A copy of the signed revocation document should be sent to the agent and all the third parties involved in the original POA process.
- The revocation can either be delivered directly or via certified mail. Getting a return receipt would act as proof that the document reached all the parties.
- Certain California jurisdictions require that the revocation be sent for a local publication as an added protection to safeguard its authenticity.
If you have any questions on setting up a California Durable Power of Attorney feel free to reach out to one of our experienced San Diego Estate Planning Attorneys.
