Planning for a client’s incapacity is an important part of estate planning. Every estate planning client should have a Durable Power of Attorney if they have someone they trust enough to name as an agent. The main purpose of a Durable Power of Attorney is to ensure that an agent is ready to act if needed. Having a Durable Power of Attorney will normally avoid the expense and potential conflict of a conservatorship of a person’s estate.
A power of attorney is a written instrument that is executed by a natural person having the capacity to contract and that grants authority to an attorney-in-fact. A power of attorney may be durable or non-durable (California Probate Code § 4022).
A Durable Power of Attorney means a power of attorney that can be exercised notwithstanding the principal’s subsequent incapacity (California Probate Code §4018).
Your agent, or your attorney-in-fact, is the person authorized to act for you in a power of attorney. An agent, or attorney-in-fact is normally a natural person, but may be an organization, corporation or other legal person.
For a power of attorney to be legally sufficient, it must:
a. Contain the date of its execution
b. Be in writing and be signed by the principal, or in the principal’s presence and at the principal’s direction; and
c. Be either acknowledged before a notary public or signed by at least two witness who satisfy the requirements of California Probate Code § 4122.
Please note that a Uniform Statutory Form power of attorney must be acknowledged before a notary public.
Unless a power of attorney indicates a time of termination, the agent’s authority to act will continue no matter how much time has elapsed since execution of the power of attorney.
A general power of attorney gives the agent broad authority to transact business for the principal. It allows the agent to do almost anything necessary to manage the principal’s property and financial affairs. A power of attorney is general, unless it is specifically limited by the instrument creating it. A limited power of attorney is one that grants the agent specific and restrictive authority to manage the principal’s property for a specific purpose.
If you have a power of attorney, it is time to review it to be certain it is up to date. If you do not have a power of attorney, it is probably time to get one.