Category Archives: Durable Power of Attorney

Using powers of attorney in California

When people are engaged in estate planning, they often do not think about who will make important decisions on their behalf while they are still living but unable to make decisions due to illness, injury or being incapacitated. Setting up powers of attorney in the event an incapacitating event occurs can help individuals make certain their wishes are followed.

There are three important types of powers of attorney that people should consider having in place. A health care power of attorney give a designated agent the power to make decisions regarding treatment for a person. This is not the same as a living will as it can encompass treatment needs in the event a person becomes incapacitated due to illness or injury.

In addition, people should consider drafting a HIPAA power of attorney. Even when people have power under a health care power of attorney, medical professionals may be unwilling to provide important health information to a designated agent due to medical confidentiality laws. If an agent has a HIPAA power of attorney, this can be avoided.

Finally, a durable power of attorney that specifies who will make financial or business decisions on a person’s behalf can be very important. Durable powers of attorney are flexible and can be used for a single transaction or for a broad variety of financial and business needs.

Powers of attorney can help people ensure they have some control over their health care, financial and business needs in the event they become incapacitated. When people are planning how to handle their assets, they may wish to speak with their estate planning attorney about drafting powers of attorney documents.

Source: Forbes, “Three Powers of Attorney Everyone Needs“, Mark Eghrari, November 14, 2014

Understanding power of attorney

In California, a legal platform that allows a person to act on an individual’s behalf is called a power of attorney. This authority may cover one specific area, such as health care, or have a much broader scope. The person who assumes this position is referred to as the agent or attorney-in-fact and is given their authority at the behest of the principal. The power of attorney may be considered durable, meaning that it remains intact even if the principal becomes incapacitated. Nondurable powers of attorney end if the principal becomes incapacitated.

Powers of attorney are created to handle many activities while an individual is not able to do so on their own. The agent may handle banking and securities, property rental or sales, tax filing, contracts, applications for state benefits, caretakers and paying bills for the principal. Those duties are outlined in the power of attorney agreement. The extent of the agent’s power is under the control of the principal and may be modified to suit the situation.

There are restrictions limiting an agent’s power. An agent may not change or draft the principal’s will or give themselves gifts from the principal’s assets. If the agent does attempt to take assets and the principal is over 65, they may be charged with elder abuse. Gifts from the principal to the agent are permitted. However, different rules may apply to gifts if the principal is incapacitated.

Having an attorney’s advice when setting up a power-of-attorney agreement may be helpful. The attorney may assist with drafting an agreement that accomplishes what the principal needs and wants, while assuring their safety.

Source: The Superior Court of California, “Power of Attorney“, October 06, 2014

What are the responsibilities of an attorney-in-fact?

In California, it is possible for an attorney-in-fact to act on an individual’s behalf pursuant to a durable power of attorney form. An attorney-in-fact is often relied upon to make health care decisions on behalf of the person who executed that form. The person designated as the attorney-in-fact can be any trusted adult such as a friend or an adult child.

The agent designated on a DPA is allowed to engage in any activities stipulated in the agreement whether an individual is competent to do so or not. This means that an agent may invest, buy property or make other financial decisions if so authorized in the document. The terms of the power of attorney become effective when it is signed, but an exception is made for a springing power of attorney which becomes effective at a predetermined date in the future.

The health care power of attorney is only effective when the grantor becomes not competent to make those decisions on his or her own. The authority given to the attorney-in-fact can be as broad or specific as the grantor wants it to be, and often includes the right to consent to or refuse treatment, the right to refuse life-sustaining efforts and the right to obtain access to medical records.

Giving another person a power of attorney over an individual’s affairs may make it easier to ensure that his or her best interests are protected at all times. Prior to creating or executing such a document, it may be a good idea to obtain the advice of an estate planning attorney.

Source: Caregiver, “Durable Powers of Attorney and Revocable Living Trusts“, September 10, 2014

Estate planning: A little organization goes a long way

Planning for our departure from life, whether that possibility is imminent or more remote, is never fun. Many people never plan at all, and still more may plan halfway but leave many loose ends untied. Creating a last will and testament is an important part of the estate planning process and is probably the one people are least likely to omit.

Yet successful estate planning goes far beyond this simple document, and it requires more than simply hiring an estate attorney. It involves working cooperatively with that attorney, along with other professionals such as one’s accountant, financial adviser and medical team, along with family and other involved parties.

One important aspect of the estate planning process is the health care power of attorney and living will. A durable power of attorney for health care can designate a trusted individual to make health care decisions for you if you become incapacitated. While this is often a spouse, it can also be a sibling, child, close friend or a significant other. This is an especially critical step for people in serious relationships who are not married but want to assure that their rights as a couple are respected by hospital staff in the event of an emergency. In addition, a living will can explain your wishes about life-saving medical treatment, resuscitation and other concerns.

If you become incapacitated or deceased, you will also need to designate someone to manage your financial and legal affairs. The financial power of attorney document clarifies these wishes. If you neglect this step, the court may need to appoint a guardian. This costly, harrowing step can be avoided by planning ahead — and assuring your guardian is fully aware of his or her designation and future responsibilities ahead of time.

None of these documents will be particularly helpful if your loved ones do not know how to access this information. You may find it helpful to keep all these legal documents, along with a list of other important information — all financial and bank account numbers, safe deposit box information, recent tax returns, and copies of real estate deeds and vehicle titles — in a secure, clearly organized box or folder. In addition, don’t forget any information about debts, creditors passwords — and of course, the contact information of all professionals on your estate planning team, including your estate attorney.

Source: Washington Post, “Organizing important documents for an orderly departure” Nicole Anzia, Feb. 12, 2014