Making plans for the possibility of being unable to manage your affairs in the future is one of the most important steps you can take to protect your finances and well-being. A durable power of attorney is a critical legal document that allows you to appoint someone you trust to handle your finances or make healthcare decisions if you become incapacitated.
At our law firm, we are often asked why having a durable power of attorney is so important. In this article, we’ll provide an in-depth look at durable powers of attorney and why they should be part of your estate plan.
What is a Durable Power of Attorney?
A durable power of attorney (DPOA) is a legal document that lets you select someone to act on your behalf for financial and/or medical matters if you become unable to make your own decisions due to illness, injury, or mental decline. The person you choose is called your “agent” or “attorney-in-fact.”
The “durable” part means that this power remains valid even if you become incapacitated. An ordinary power of attorney would end if you could no longer make your own choices.
There are two main types of durable POAs:
- Durable financial power of attorney – lets your agent manage your financial affairs, such as banking, bills, taxes, real estate transactions, etc.
- Durable medical power of attorney – It lets your agent talk to doctors and make medical choices if you can’t communicate.
Why do you need a durable POA?
Here are the key reasons why having a durable power of attorney is so important:
Select Your Own Agent
A DPOA allows you to choose someone you trust completely – whether it’s your spouse, adult child, sibling, or close friend – to manage your finances and healthcare based on your wishes if you cannot do so yourself. You get to decide who that person will be rather than leaving it up to chance.
Avoid Guardianship
If you become incapacitated and haven’t authorized a durable power of attorney, your family may have to go to court to become your guardian so they can handle your affairs. This guardianship process can be expensive, time-consuming, emotionally draining, and public. A DPOA helps you avoid court intervention.
Handle Emergencies Quickly
Suppose an unexpected illness or accident leaves you unable to communicate. In that case, your agent can immediately step in and start managing your finances and healthcare decisions when you need that help the most. A DPOA enables them to act swiftly on your behalf.
Make Healthcare Wishes Known
Your medical durable power of attorney makes your preferences clear to healthcare providers, so your family doesn’t have to guess what you would want. It provides certainty during difficult times.
Manage Assets Responsibly
A DPOA for finances lets your agent continue managing your assets prudently if you cannot do so yourself. This helps provide stability for your family and preserves your hard-earned assets.
Stay in Control Longer
Having a DPOA in place lets you keep control of your affairs longer since your agent can only act when you are truly unable to make your own decisions. Without it, you risk losing control sooner.
How to Create a Durable Power of Attorney in California
If you’ve decided you need to get a power of attorney, here are some tips for creating one in California:
- Choose Your Agent Wisely: Put serious thought into selecting your agent. This should be someone who is ethical, financially responsible, and willing to honor your preferences. Discuss it with them first to confirm they feel comfortable accepting the role.
Also, name backup agents in case your first choice is unable to serve. Your partner or spouse may seem the obvious option, but consider adult children, relatives, or close friends. - Be Specific About Powers Granted: Carefully outline the powers you want to grant your agent. For a financial DPOA, you can allow broad authority over banking, investments, property, and government benefits. Or you can limit access to certain accounts or transactions.
For a healthcare DPOA, specify the types of medical decisions you want your agent to be able to make on your behalf. - Consult a Chico Estate Planning Attorney: Prepare your DPOA with the help of an accomplished estate planning and elder law lawyer to make sure it reflects your specific desires and conforms with California law. For instance, we always build safeguards to deter financial abuse of our clients. We can also advise whether a revocable living trust makes sense in addition to a DPOA.
- Follow Signing Formalities: California requires your signature on a DPOA to be witnessed by a notary public or two adult witnesses. Following proper signing formalities makes your DPOA legally binding.
- Register with USLF.com: Consider registering your healthcare DPOA with the US Living Will Registry. This allows providers nationwide to access it if needed. We can handle this registration for you.
- Inform Your Agent and Family: Once your DPOA is complete, provide copies to your agent and discuss their responsibilities. Also, give your family members a copy so they understand your wishes.
Can a Durable Power of Attorney Be Revoked?
Yes, you retain full control over your DPOA as long as you have mental capacity. You can update it, replace agents, or revoke it entirely. Any changes should be done in writing.
Be sure to notify your agent and family if you revoke or amend your DPOA. Also, destroy copies of old versions to avoid confusion.
Let Us Help You Plan for the Future
Having a durable power of attorney in place is one of the greatest gifts you can give your family. It provides them security in knowing they have the legal ability to take care of you if the need arises. It also spares them the expense and family conflict of conservatorship court proceedings.
The experienced estate planning attorneys at Legal Norcal can help you put the right DPOA in place. We have two decades of experience counseling California residents on creating effective and protective DPOAs customized for their unique needs.
