Any person, not only seniors, may face circumstances where she cannot handle daily and legal tasks because of an unexpected accident or health condition. A power of attorney may be insurance that a trusted person can step in and handle such personal matters.
The person who executes a power of attorney document, known as the principal, appoints one or more agents or attorneys-in-fact to represent him. The attorney-in fact can perform most any task authorized by the principal. A principal can also place restrictions on financial decisions and other tasks.
An agent or principal may be authorized to handle daily tasks such as banking, trading stocks and bonds, paying bills, buying or selling property, hiring people to perform services such as cleaning and health care, file tax returns, negotiate and sign contracts and establish a trust. The attorney-in-fact may also apply for benefits for the principal such as Social Security or Medi-Cal. However, an agent cannot make or change the principal’s will.
An agent can also execute additional powers of attorney for specific purposes such as signing documents when both the agent and the principal are incapacitated or away. These documents can include sales documents or contracts for the sale and purchase of a house or car.
A durable power of attorney remains in effect until the principal cancels it or dies. Providing a gift to the agent may be restricted under the durable power of attorney.
The principal can decide when the power of attorney becomes effective which can be immediately or upon a certain event such as when the principal becomes incapacitated. The principal has the power to continue to perform tasks even if a power of attorney is in effect.
The principal must sign the power of attorney or have someone sign it before their presence. A notary public must acknowledge the document which must also be signed by at least two witnesses. An agent cannot be a witness.
Because an agent has access to financial documents and authorization to make important decisions, it is essential to select a trustworthy, honest and competent attorney-in-fact. Anyone contemplating a power of attorney should seek legal assistance to help assure that a competent agent is selected and that the document clearly and accurately reflects the principal’s wishes and that it complies with California law.
Source: The Superior Court of California, County of Santa Clara, “Power of attorney,” Accessed June 6, 2016