Power of Attorney forms are useful documents for many occasions. Increasingly, people are using a specific type of Power of Attorney to authorize other persons to act on their behalf in the event of disability. This article will give you a basic understanding of why you need a Power of Attorney:
- What is a Power of Attorney?
- Types of needs for a Power of Attorney
- The role of an agent (attorney-in-fact) on the Power of Attorney
What is a Power of Attorney and why would you need one? A Power of Attorney is a document created to give someone you trust the power to act on your behalf should a need arise. What type of needs are we talking about? Generally, it’s your financial and business needs after you have become incapacitated, such as after having a serious stroke, becoming injured in a serious accident or perhaps experiencing the onset and decline of Alzheimer disease. For any number of reasons, before you may become incapacitated in the future, you want to choose someone now, to act on your behalf to manage your finances when you no longer can.
The broad type of Power of Attorney is called a Durable Power Of Attorney. A Durable Power of Attorney is intended to remain in effect even if a person becomes disable or incompetent. Here are the various types of Power of Attorney:
- Unlimited Power of Attorney
- Limited Power of Attorney
- Durable Unlimited Power of Attorney for Financial Affairs (effectively immediately)
- Durable Unlimited Power of Attorney for Financial Affairs (effectively on disability)
- Durable Health Care of Power of Attorney
- Unlimited Power of Attorney
- Revocation of Power of Attorney
When you create a Power of Attorney you choose someone who will be your agent to act on your behalf. The powers that you give that agent are up to you. They could be general powers authorized by the Uniform Statutory Form Power of Attorney Act, they could be powers given a trustee under the Probate code, or they can be powers that you specifically spell out. There are some powers should wish to give them to your agent, that need to be explicitly spelled out in your Power of Attorney if you wish your agent to have those powers if and when you become incapacitated. These specific powers include: the power to create, modify, revoke or terminate a trust; make or revoke a gift of your property; exercise your right to disclaim or reject any payment from an estate or trust; create or change survivorship interests in your property or in property you have an interest; change or designate beneficiaries to your property, and there are others.
If an agent you have chosen has agreed in writing to act for you, the agent must act pursuant to the terms you have stated in your Power of Attorney. If you are able to communicate, your agent who is acting on your behalf must maintain regular contact and communications with you and follow your instructions. You can also modify if you wish, the powers that you have given to your agent, and if need be, revoke his or her powers all together.
Third persons are required to honor powers of attorney pursuant to the Probate code. However, they are entitled to ask your agent for proof of their identity, specimen signatures’ of you and the agent, as well as requiring the agent’s affidavit establishing that the Power of Attorney is still in effect. Under certain circumstances, and depending on the types of transactions that are involved, the Power of Attorney can be used and accepted outside of California. However, it is best advised that if you move out of California, you should execute a new Power of Attorney in your new state of residence.
We at East Bay Probate and Trust Administration can help you to create the right type of Power of Attorney for your specific needs. Contact our office to get your durable Power of Attorney underway and enjoy a peace of mind.