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Understanding Types of Power of Attorney

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Types of Power of Attorney in California

A power of attorney (POA) is an estate planning document that grants another person, called the agent or attorney-in-fact, the authority to act on your behalf. In California, there are four main types of POAs, each offering a specific scope of decision-making power: general, durable, limited, and medical.

Understanding these distinctions is crucial for selecting the POA that best suits your individual needs:

  • General Power of Attorney. This grants the broadest range of authority, allowing your agent to manage most financial and legal matters, including real estate transactions, bill payments, and investment decisions. It's important to note that a general POA typically does not encompass healthcare choices.
  • Durable Power of Attorney. A critical feature of a durable POA is that it remains valid even if you become incapacitated. This ensures continuity in managing your affairs if you are unable to make decisions for yourself due to illness, injury, or other reasons. A durable POA can be general, granting the same broad authority as a non-durable general POA, or it can be limited, as described below.
  • Limited Power of Attorney. This POA restricts the agent's authority to specific tasks or actions. For instance, you might create a limited POA to authorize your agent to sell a particular car or manage your bank account while you are traveling. Limited POAs can also be made durable.
  • Medical Power of Attorney (also known as an Advanced Health Care Directive). This POA focuses solely on healthcare decisions. It empowers your agent to make medical choices on your behalf if you are unconscious or otherwise unable to communicate your wishes. A medical POA can be particularly valuable in ensuring your medical care aligns with your preferences.

Choosing the Right Power of Attorney

The most suitable POA depends on your circumstances and the level of control you wish to grant your agent. If you require comprehensive assistance with your financial and legal affairs, a general durable POA may be appropriate. Conversely, for specific tasks or healthcare decision-making, a limited or medical POA might be preferable.

When to Consider Drafting a Power of Attorney

While often associated with elder care planning, a power of attorney (POA) is a valuable tool for individuals of all ages. Some key situations that can signal that you should consider drafting a POA include:

  • Travel. If you anticipate extended travel or business trips, a limited POA can grant a trusted individual temporary authority to manage specific matters like bill payments or property maintenance.
  • Medical procedures. In the event of an accident or illness rendering you unable to make medical decisions, a medical POA empowers your designated agent to communicate your wishes to healthcare providers. This ensures continuity of care and upholds your preferences.
  • Incapacity due to illness. A durable POA safeguards your financial and legal affairs in the event of long-term illness or disability. With this POA in place, your designated agent can manage your finances, investments, and property, ensuring a smooth transition and minimizing disruption. If you discover you have a life-threatening health condition, you should consider drafting a POA.
  • Supporting loved ones. Even young adults can benefit from creating a POA. Granting a trusted individual temporary decision-making authority can be helpful during unexpected situations, such as an accident or hospitalization.

It is also important to note that if you are drafting an estate plan, a durable power of attorney is often a document that is included. If you are to create your estate plan, it is also in your best interest to consider including a POA.

Power of Attorney Requirements

It is vital to ensure your POA is created and executed following California's legal requirements. According to California Probate Code § 4121, a power of attorney must meet the following requirements to be considered “legally sufficient:”

  • The document includes the date of its execution.
  • The document is signed by the principal (i.e., you are the principal) or in the principal’s name by another adult in front of the principal.
  • The document is signed by at least two witnesses who are adults; these adults cannot be the attorney and must witness the principal signing the POA. If there are not two witnesses, the POA can be signed by a notary public.

How to Create a POA

Creating a power of attorney (POA) in California with the assistance of an attorney is the most secure and recommended approach. The process is as follows:

  • Consultation:
    • Initial meeting. Discuss your goals and desired level of authority for your agent. The attorney will explain the different POA types and their suitability for your needs.
    • Agent selection. Identify a trustworthy individual to act as your agent and discuss this choice with the attorney.
  • Document drafting:
    • Form selection. The attorney will select the appropriate California state-approved POA form based on your chosen type and desired level of authority.
    • Customization. Your attorney can tailor the form to incorporate your specific needs and limitations for your agent's authority.
  • Execution:
    • Signing and witnessing. As we mentioned, California law requires you to sign the POA in the presence of a notary public or two competent adult witnesses who are not named as your agent.
    • Notarization. If witnessed by a notary, your signature is the only one required to be notarized; the witnesses’ signatures do not require a notary. 

Following the notarization, you might also consider the following:

  • Distribution. Once finalized, the attorney can advise on how to distribute copies of the POA to your agent, financial institutions, and other relevant parties.
  • Safekeeping. The original signed document should be stored in a secure location accessible to your agent when needed.

Can You Modify or Revoke a POA?

Yes. California law allows people to revoke a power of attorney for any reason. However, you must be of sound mind. Revocation typically involves a written statement declaring your intent to cancel the POA. It is advisable to have the revocation witnessed by a notary for added legal weight. Once revoked, the agent's authority ceases immediately.

You can also modify a POA. Some POAs include provisions for modification outlined within the document itself. If there are no outlined terms, you can draft a new power of attorney that supersedes the original, effectively modifying the agent's authority and any limitations or specific powers granted. A notary should also witness this new document.

Get Legal Counsel

Consulting with an attorney can provide guidance on selecting the appropriate POA type, ensure compliance with legal formalities, and address any questions you may have. The Law Office of Mitchell A. Port is backed by over four decades of legal experience and is known for offering clients personalized, comprehensive counsel.

Call (310) 526-3433 to request a free case consultation today.