As a parent or relative ages, it can become stressful when important decisions must be made. You want to have respect for their independence but also protect them from negative consequences of mental or physical health problems.
Creating a power of attorney (POA) is one way to ensure that no matter what happens down the road, your loved one is taken care of and their wishes will be prioritized.
A power of attorney (POA) document gives someone (a competent adult over the age of 18) the authority to handle legal or financial matters for that person under specific circumstances. When a POA is created, the person chosen to act for a loved one is called your attorney-in-fact or your agent. The power of attorney only steps in if that person is no longer mentally capable of running your personal, legal, and financial affairs.
A power of attorney is accepted in all states, but the rules and requirements differ from state to state. According to Legal Zoom, California recognizes five types of POAs: general, durable, springing, limited, and medical.
- General POA: allows your agent to act on your behalf on all financial matters. It lasts until you become incapacitated. For example, if you have granted your friend Candace the power to manage your finances, her authority will end once you become legally incapacitated.
- Durable POA: Having durable authority gives the same oversight as that in a general POA, even if you as the principal become incapacitated. So, in the example above, Candace would still be able to manage your finances, even if you become incapacitated for any reason.
- Springing POA: Like that of general authority, Springing POA becomes effective if you do become incapacitated. In this case, your friend Candace can legally manage your finances only if you become incapacitated.
- Limited POA: Having limited power allows you to limit the authority you give your agent. It expires when the transaction is complete, or a specific time frame is reached. For example, if you are away on an extended vacation or out of the country for work, you might grant your friend the authority to sell your home in your absence. He will be able to sign your name, negotiate terms, and handle the financial aspects of the transaction. Once your home is sold, your friend’s authority ends, and the power of attorney expires.
- Medical POA: Allows you to assign an agent to make healthcare decisions for you, in the event you cannot make them on your own.
In California, you must use the form created by the state for your POA. Forms can be found online but unless you have knowledge in this area, its best to consult with professionals. You may consider an elder law attorney or consider working with a trusts and estates attorney to make sure that your power of attorney and estate plans are compatible.
- You can ask your friends and family for referrals. If you already have another attorney for other matters, s/he may be able to recommend a trusts and estates attorney.
- County and state bar associations usually offer free referral services. You can contact your local bar association and ask them about trusts and estates attorneys.
Powers of attorney are important legal documents that every adult should consider. It’s a good idea to first have a discussion with your loved one and any close family members so everyone is on the same page with the process and the loved one chosen to be the ‘agent’ is prepared for the responsibility.
Your POA form will be considered final once signed. Be sure and keep the form in a safe place and give a copy to your agent. For healthcare POAs, be sure to also give a copy to your healthcare provider.
Once you have a POA in place, you will have peace of mind that things will be taken care of if ever needed.
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