The document known as Power of Attorney (POA) allows one party to make legal decisions or handle financial affairs on another party’s behalf. A family member can not automatically act as an agent for a relative without a POA. The person who wishes to grant another party powers of attorney must sign a legal document to that effect.
Each state has its own laws relating to POAs. This article showcases California state laws relating to power of attorney. Individuals should work with an attorney to identify or create a power of attorney document that accomplishes the job in accordance with the legal requirements of their state. Powers of attorney can grant general powers or be limited to a specific subject, such as a real estate transaction or decisions about medical care.
When a POA Is Needed
A person needs a power of attorney when they want another person to deal with a specific task, such as signing documents for them if they are unconscious, away or otherwise unavailable. A person granted a power of attorney may be able to sign a contract for the sale of another person’s home, pay their bills, file their tax returns or apply for benefits like Supplemental Security Income (SSI).
The principal is the person who assigns one or more of their powers to another party; the agent or attorney in fact is the person who has these powers assigned to them. In California, a natural person with the capacity to enter into contracts may execute a power of attorney. A minor cannot contract until they become an adult. A person with a mental health disorder may still retain the capacity to contract.
What Must the POA Contain?
A power of attorney must contain the date of its execution, or the date that the parties entered into the contract. The POA must be signed by the principal or in the principal’s name by another adult in the principal’s presence, at the principal’s direction. The power of attorney must be acknowledged before a notary public or signed by at least two witnesses who are adults and not the principals’ agents.
Documents to Establish a POA
A POA document can be a preprinted legal form from a stationery store, a legal document crafted by the principal’s estate planning lawyer, or a written copy of the correct language from the state's probate code that relates to POAs. In California, that is Probate Code Section 4401. A preprinted form should contain the same language as the relevant state statute regarding POAs. Certain institutions, like banks, have their own POA forms.
When a POA Takes Effect
The principal decides when a POA goes into effect, with time frames that can range from immediately to when the principal loses the ability to make their own financial decisions. The writing to create the POA should have all the necessary signatures. The principal can retain the power to make all the decisions that an agent would make otherwise. The principal can design a POA to expire on a certain date or after an agent completes a task, such as selling a home.
Bank POA Forms for Financial Transactions
Rules for establishing POAs and the forms differ by financial institution. A principal or agent should visit the bank’s website to look at the forms and talk to a bank representative to figure out what paperwork to complete. For example, Wells Fargo requires the agent to complete numerous forms, including the power of attorney submission cover sheet, a notarized attorney in fact affidavit, the power of attorney document, and documentation to verify the agent’s identity, which is only necessary if the principal is incapacitated.
If the principal is incapacitated, the agent will also need to provide a copy of a document to verify the agent’s Social Security number, which could be the agent’s Social Security card or a W-2 wage and tax statement, and a copy of a document to verify the agent’s name, address and date of birth. The latter document could be a driver’s license, state ID card, military ID or U.S. government-issued alien ID card.
Bank of America may limit the types and sizes of transactions an agent may perform. It offers a principal the option of establishing a limited power of attorney just for banking transactions. When a principal wants to set up a power of attorney in a financial center, such as Bank of America, the agent must be present to sign a power of attorney signature card addendum for each account for which the principal wants to give the agent authority.
Durable Power of Attorney
With a "durable" power of attorney, the agent retains their powers even when the principal lacks capacity. A general power of attorney ends when the principal becomes incapacitated or dies. Durable powers of attorney remain in effect until the principal dies or revokes the power granted to the agent. In California, an agreement for a durable power of attorney must be in writing. It can contain statements such as “This power of attorney shall not be affected by subsequent incapacity of the principal” or “This power of attorney shall become effective upon the incapacity of the principal.”
Appointing Multiple Agents
A principal can grant multiple agents a power of attorney. This arrangement can work if two or more agents work in concert together. A principal can also appoint alternate agents. The alternate agent will act if the original agent cannot or does not want to serve. When a principal’s friends, relatives or officials learn of a problem with an agent, they can file a petition with the probate department of the principal’s local court. The petition can ask the court to review the agent’s actions. The court can then investigate the agent’s actions.
Revocation of a Power of Attorney
A principal should cancel an agent’s POA in writing and share the writing or the new POA with institutions, like banks, that had the old POA. If the principal does not properly cancel the original POA, the agent and the bank may erroneously rely on the original document.
Problems With Recognition of POA
An agent who has problems getting other parties to recognize the POA should ask the court for help. They may file a petition to request that the court confirm the agent is acting as the principal’s lawful agent. The agent can also request the court to order an institution like a bank to honor the agent’s authority.
Understanding the Nature of Conservatorships
A conservatorship is a court case that involves a judge appointing a responsible person or organization to care for an adult who cannot care for themselves. Examples of adults who cannot care for themselves include victims of a catastrophic illness or serious accident. A conservatorship of an adult may also be called establishing a legal guardian for an adult.
A conservatorship can be temporary or permanent. A temporary conservator will handle a conservatee’s immediate needs that cannot wait until a general conservator is appointed. A temporary conservator may also fill in temporarily between permanent conservatorships. A temporary conservatorship usually lasts for 30 to 60 days. The conservatorship may be of the person, the estate or both.
Without a judge’s prior approval, a temporary conservator cannot move the conservatee from the conservatee’s home, unless there is an emergency, sell the conservatee’s home or force them to give up their lease, or sell or give away an estate asset.
Ending a Conservatorship
Typically, a conservatorship is permanent, but may end when the conservatee can handle their own affairs, the conservator has no more assets, the conservatee dies, the conservator dies, the court removes the conservator, or the conservator resigns. If the conservator voluntarily leaves their position, the judge may ask them to find a replacement. If there is not a suitable person, the court may appoint a Public Guardian or a professional fiduciary.
Professional fiduciaries provide critical services to seniors and people with disabilities. They are licensed professionals who must pass a state examination and complete approved education courses.
A limited conservatorship is a court case in which a judge gives a responsible person specific rights to care for an adult who has a developmental disability. There are two types of limited conservatorships, the first where the conservator cares for and protects the developmentally disabled adult and provides for that party’s needs associated with daily life. The second type is where the conservator handles the developmentally disabled adult’s financial matters, such as paying bills.
A conservatorship of the second type is not necessary if the developmentally disabled adult receives public assistance like SSI and has no other assets or if the developmentally disabled adult earns a wage. A conservatorship of the estate is needed if the developmentally disabled adult has other assets, such as inheritance that is not in a special needs trust. An officer of the court's investigator’s office will review the case one year after the conservatorship is granted, and every two years after that. The investigator will also visit the developmentally disabled adult.
Alternatives to Conservatorship
There are financial and medical alternatives to seeking a conservatorship. The financial alternatives include power of attorney, a substitute payee for public benefits like veterans’ benefits, informal arrangements, joint title on bank accounts and other property and living trusts, also called inter vivos trusts. The medical alternatives include an advance health care directive, court authorization for medical treatment, informal personal care arrangements, restraining orders to protect against harassment and living trusts.
POAs and Conservatorship
Sometimes a principal creates a POA, and the court then appoints a conservator for the principal’s estate. Unless the court or the conservator say no, the agent can continue acting under the existing POA. The agent must inform the principal and the conservator about everything the agent does in the principal’s name.
Elder Abuse by Agents
An agent who takes a principal’s property without their authorization can be charged with elder abuse. A state may have specific statutes that heighten penalties for the financial abuse of elderly people. In California, the penalty for each incident of financial elder abuse is up to six months in jail and a $1,000 fine.
Estate Planning and POAs
When a person grants another party power of attorney, the agent can assist the person with estate planning. Assistance may range from opening or modifying a bank account, receiving insurance proceeds and receiving distributions from 401Ks. An agent can establish a trust, but cannot create or change the principal’s will. An agent cannot make gifts to themselves from the principal’s property, but the principal can choose to make a gift to the agent.
If the POA is a durable POA, a gift to an agent after the principal becomes incompetent may be restricted by law. That is because if the principal is incompetent, the agent will be making a gift of the principal’s property to themselves. A principal should talk to their attorney about how to handle such concerns.
Attorneys and Accountants
An attorney can take many actions for a client without having to be an agent under power of attorney document. Attorneys are bound by the state’s laws that govern attorneys’ conduct. Accountants can also take actions on a client's behalf, but typically only to a limited extent and only as to the client’s finances. Accountants are bound by the state’s laws that govern accountants’ conduct. Attorneys and accountants both charge fees for their services.
- The Superior Court of California, County of Santa Clara: Power of Attorney
- California Probate Code: Sections 4120 - 4130 Creation and Effect of Powers of Attorney
- California Probate Code: Sections 4700 - 4701 Advance Health Care Directive Forms
- California Probate Code: Sections 810 - 813 Legal Mental Capacity
- California Penal Code: Sections 368 - 368.7 Crimes Against Elders, Dependent Adults, and Persons With Disabilities
- California Courts: Conservatorship
- Wells Fargo: Power of Attorney Packet
- Bank of America: Account Information FAQs
- Bank of America: Power of Attorney
- California Courts: Alternatives to Conservatorship
- The Superior Court of California, County of San Francisco: Conservatorships of Adults
- Office of the Attorney General of California: Estate Planning, Wills and Trusts
- California Business and Professions Code: Sections 6000 - 6243 Attorneys
- California Business and Professions Code: Section 5000 - 5158 Accountants
- California Department of Consumer Affairs: Welcome to the Professional Fiduciaries Bureau's Website
- Make sure your signature always indicates that you are signing as an agent under a power of attorney authorization.
- If you do not sign legal documents as a power of attorney agent, you can become personally liable for the payment or contract you have signed.
- As agent for a principal you have a legal fiduciary duty to manage that principal's financial assets and carry out their wishes regarding business matters. Consult an attorney if you have any questions about your responsibilities.
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.