Power of Attorney
What is a Power of Attorney?
A power of attorney (POA) may be used in a variety of situations, allowing a person or organization to be appointed to manage your affairs if you were to become incapacitated. There are, however, many different types of POAs, with each type giving the person making those decisions a different level of control. Keep in mind that a power of attorney is only valid if you are mentally competent when you sign the agreement, and (in certain cases), incompetent when the power of attorney goes into effect. If you think your mental competency could be called into question in the future, it is a good idea to have this verified in writing by your doctor.
A power of attorney must be signed and notarized or witnessed by two people. Until a bank or other type of business receives a copy of a power of attorney, they will not allow your agent to act on your behalf. If you want to ensure your document meets all necessary California legal requirements, it is important that you have an experienced estate planning attorney prepare the document.
What are the Different Types of Power of Attorney?
There are many different kinds of POAs, including the following:
- General Power of Attorney—A general power of attorney gives fairly broad powers to a person or to an organization to act on your behalf. This person is known as an “agent” or as an “attorney-in-fact.” The powers you give to your agent may include such things as handling your finances, handling your business transactions, operating your business interests, settling a claim made against you, giving gifts to your loved ones, and even employing professional help or buying life insurance for you. If you know you will be away from your home and/or business for more than a few days, you might sign a general power of attorney to allow a person of your choice to handle your day-to-day affairs. You might also need a general power of attorney in the event you were to become incapacitated, thus unable to make decisions for yourself. Your estate plan may include a general power of attorney, given to a person who is capable of handling your financial issues.
- Special Power of Attorney—A special power of attorney creates a list of the specific powers you choose to grant to your agent. Perhaps you have health issues or other commitments that prevent you from being able to fully handle your own affairs. You could grant your agent the power to sell or buy property on your behalf, to handle your normal business transactions, to manage your real estate, or even to collect debts on your behalf. Many special power of attorney documents have a specific end date, while others are open-ended, but grant a very specific power to the agent.
- Healthcare Power of Attorney—You might choose to have a healthcare power of attorney prepared in the event you were severely injured, unconscious, or mentally incompetent. The agent you designate would make healthcare decisions on your behalf, carrying out your wishes when you are unable to do so. (See also Advanced Healthcare Directive).
- Durable Power of Attorney—A durable power of attorney goes a step further. A durable power of attorney could be a general power of attorney, special power of attorney, or healthcare power of attorney, which has a provision that keeps a power of attorney in effect if you loose capacity. The durable power of attorney essentially safeguards against any potential issues in the future. You can also have a durable power of attorney prepared, which would only go into effect when you became physically or mentally unable to make decisions on your own. This type of durable power of attorney would not go into effect until you were deemed mentally incompetent. Your mental competency would have to be determined by two licensed physicians who agree on you whether you are mentally incompetent.
How to Choose a Power of Attorney?
As you might imagine, choosing a power of attorney requires that you place a significant level of trust into another person. That person might be a family member, an attorney, a friend, or even an organization. Whoever you choose, you will want to be very sure the powers given to your agent will not be abused, that your best interests will always be looked out for, and your wishes respected. An agent must keep very detailed records regarding any transaction carried out on your part. In your power of attorney document, you can specify that your agent report to a third party—whom you also trust.
You can choose to have more than one agent listed in your power of attorney, under the theory that multiple agents provide a system of checks and balances. The flip side of this is that having multiple agents can lead to disagreements between the agents, potentially stalling out important transactions. Always have a backup agent, in the event your first choice becomes ill, or otherwise unable to serve in the designated capacity.
Can You Revoke a Power of Attorney in California?
A power of attorney can be revoked at any time—so long as you are mentally competent to do so. Revoking a power of attorney requires that you do it in writing or orally, depending on the terms of the POA. The revoked power of attorney must be delivered to your agent, and any third parties your agent may have contact with on your behalf, like your bank. If your power of attorney was recorded at the county clerk’s office, the revocation of the power of attorney should be recorded there as well.
How an Experienced California Estate Planning Attorney Can Help
A power of attorney can be an integral part of your overall estate plan. Attorney Mark Gullotta can help you through the process, ensuring you have a power of attorney document which fits your situation and accurately reflects your wishes. Mark Gullotta has a goal of helping you have a more comfortable planning experience, whether you are creating an entire estate plan from scratch, or only need a single document. With the goal of always achieving the desired protection for your loved ones, Attorney Gullotta seeks to minimize unexpected surprises throughout the process, offering upfront pricing and a solid, predictable estate planning process. Contact the Law Offices of Mark Gullotta today.