Los Angeles Estate Planning Attorney | Law Office of Philip J. Hoskins | Durable Power of Attorney
On this page you will find information about a Durable Power of Attorney for property and financial matters. The purpose of such a power is to give someone authority to act on your behalf in the event you are unable to do so because of accident, illness or because you are in another location, or any other reason you might have for empowering another to act on your behalf.
Here are some of the considerations regarding such a power of attorney.
Do I need one of these?
The purpose of a durable power of attorney for non-health related matters is to give someone the authority to act on your behalf regarding financial matters if you become incapacitated or disabled. Without such a document, there may be no one with the necessary legal authority to manage your financial affairs unless a court appoints a conservator of your estate.
Being appointed by the court can be time consuming and costly. Family members are not always available or committed to carrying out your desires. The durable power of attorney provides an economical, effective tool so that someone you trust can handle your property and finances.
What is a "Durable" Power of Attorney?
A power of attorney can be used in a variety of circumstances, such as when you would be out of town and want to authorize someone to sign a document on your behalf in your absence. A normal power of attorney is valid and gives the agent you appoint power to act on your behalf until you are incapacitated or die. Because there are many situations in which you may want your agent to act on your behalf during a period of incapacity, the legislature created something called a durable power of attorney.
The durable power of attorney is valid even when the person who grants it is not capable of acting himself or herself. This is, therefore, an important tool in designing a plan for the orderly management of your affairs.
The durable power of attorney deals with financial matters such as accounts, pension and retirement, social security, Medicare, asset management for those assets not held in a revocable trust, litigation and other such matters.
What if I also have a revocable trust
Even if you create a revocable trust and a Durable Power of Attorney for Health Care, we recommend that you also consider one of the durable powers of attorney. They deal with different aspects of your life, the one for health care decisions and this one for financial matters.
Selecting an Agent
You may have a trusted friend to whom you feel you can entrust these decisions. Remember that without such a power, there may be no one who can act on your behalf in an emergency with regard to your accounts, property, receiving checks and depositing them, etc., except for an immediate family member. Even such a family member is likely to encounter resistance and delays in handling your affairs.
You should make certain that the person you choose is likely to be available and will follow your instructions faithfully. If you have a question about the person, it is not wise to appoint that person.
When you have decided who the agent will be, talk over your intentions with them. Let them know what financial and property matters they may have to take over if you need them. Make certain they understand that this may be a significant imposition on them and check to see that they are willing to take it on.
When Should My Durable Power Begin?
It depends upon whether you want the power to begin immediately (immediate power) or whether you prefer to wait for the power to take effect only if you are unable to act yourself (the so-called "springing power").
An immediate power is one that goes into effect when you sign it. This is could be appropriate where there is a need to give another person the to act on your behalf right away.
1. When Is An "Immediate" Power Effective?
An immediate power of attorney is effective as soon as you sign it. This can be helpful in situation where you are frequently out of the country or otherwise not available to take action with regard to your property interests. You may want to give the power to take those actions to another, trusted person acting on your behalf.
2. When does a springing power take effect?
A springing power simply means that it has no effect until two people from among those that you have named determine you to be unable to act. The springing power is very advantageous because it is effective only when you need it. The Individual's Estate Planning Handbook form asks you to specify who can decide whether you are incapacitated if you are using the springing power. Two of these people are your physician and your agent. The form asks for two additional people. Obviously, care should be taken in selecting who these people should be.
The springing durable power of attorney form provided with provides that the durable power is effective when two of the four people named in your durable power of attorney determine conclusively that you are incapacitated. That determination must be placed in writing and attached to your durable power of attorney.
How Much Power Do I Give My Agent?
A Durable Power of Attorney can grant to your agent virtually any power that you can exercise yourself. These powers can have wide ranging implications. While you may have recourse against an agent that you appoint but who either fails to follow your instructions or acts against your interests, that remedy may never undo the harm caused. Therefore, the convenience of giving an agent power to act for you must be carefully weighed against the potential for harm that could be caused.
If you are uncertain about whether you want to grant a specific power on the form, we recommend that you do not do so. Discuss any questions with an attorney.
Duration of a Durable Power
A Durable Power of Attorney is effective from the date designated in the document for it to begin until the date your terminate it in writing. You can, however, provide that the power will terminate as of a designated date in the future, such as three years from the date of creation.
You can place your own special instructions or limitations on the powers you grant or the methods and occasions on which your agent exercises those powers. Such as:
"My agent has authority to make charitable contributions on my behalf only to organizations that support human rights. I prefer that he make such contributions to the following organizations: [list them]"
Signing Your Durable Power
Your Durable Power for financial matters needs to be signed and dated by you and either notarized or witnessed by 2 people. We recommend that you have it notarized and if you have granted powers that may affect real property, it must be notarized. The power does not need to be recorded but that may be necessary as a part of a real estate transaction undertaken on your behalf by your agent.
Acceptance of your durable power
In practice, most people that your agent will deal with on your behalf will accept a validly executed durable power of attorney in the form we have provided by Individual's Estate Planning Handbook . The document itself gives assurance to third parties and the law provides that if you use the California statutory form, any California entity must accept it.
Nevertheless, some institutions, such as some banks, may insist that the durable power of attorney be on one of their forms. If you know that a specific power will be used with a specific person or institution, you may want to check on this issue in advance.
Copies of your power of attorney
We recommend that you keep the original of the durable power of attorney but that you give a copy to your agent and anyone who is likely to interact with your agent. This might include your bank, creditors, mortgage company or others that you would expect your agent will have to deal with.
Terminating your power of attorney
You can terminate a durable power of attorney by any writing which cancels it. You can use any written statement, similar to that found in this Guide. Problems could arise, however, if it is claimed that you do not have the mental capacity to cancel your durable power of attorney. If this occurs, you will need an attorney.
The other problem that could arise is where there are copies of your durable power of attorney in the hands of people you do not know about. An agent who has evil intentions might be able to act on your behalf with such people even after you have terminated the power. Again, consult an attorney if this seems to be the case.
For expert advice when creative or revising your will or estate plan, seek the assistance of a Los Angeles estate planning lawyer at the Law Office of Philip J. Hoskins. Call us today.
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