When an individual becomes mentally or physically incapacitated, they often have difficulty performing basic tasks like paying bills or balancing their checkbook. Older individuals may become incapacitated due to Alzheimer’s disease or some other form of dementia. Even relatively young people can become incapacitated by serious illness or a disabling injury. Regardless of the reason for the incapacity, California law allows a trusted individual to step into the shoes of the incapacitated person and handle their affairs by means of a durable power of attorney.
In a power of attorney one individual, known as the principal, grants authority to another person, known as the attorney in fact, to handle the principal’s financial, business, or other affairs. The attorney in fact does not have to be an attorney at law. He or she should, however, be someone the principal trusts implicitly, because the powers granted by a power of attorney are typically broad and wide-ranging.
A durable power of attorney is one in which the principal expressly authorizes the attorney in fact to act on their behalf in the event the principal becomes incapacitated. Armed with the power of attorney, the attorney in fact can sign legal documents, write checks, authorize payments, and transact other business in the name of the principal.
It is common for individuals to prepare power of attorney documents at the time they prepare their other estate planning documents. It is important to sign the power of attorney while one is of sound mind and not incapacitated; once a person is incapacitated it may be too late to sign a valid power of attorney.