A time may come when you won't be able to manage your own money. It's not a happy thought, but it is something you need to consider. If you become injured or sick and you are not able to manage your money, it will be necessary for someone else to assist you. You can select that person if you prepare a California durable power of attorney for finances. This is a legal document by which you give a trusted family member or friend the authority to act for you if the need arises.
California Durable Power of Attorney
A power of attorney is a legal document giving a named person, called an agent, the power to act in your stead. The power of attorney is often called a "POA," and it confers only the authority specified in the document. It can be for a limited, one-time affair, like selling something you own, or it can be for a series of transactions over time. A general California power of attorney for finances gives the agent all the same authority you yourself have over your money and assets.
A power of attorney is usually immediately effective. For example, if you give your brother a power of attorney to sell your car for you, it is probably to facilitate a quick sale. California powers of attorney terminate on a date stated in the document, when you divorce (if your spouse is named as POA) or whenever you rescind the POA, which you are free to do while you are competent. It also generally ends if you become incapacitated.
However, a durable power of attorney doesn't end if you become incapacitated. In fact, some types of durable POAs (called springing powers of attorney) come into effect only if you become incapacitated. For example, you might want a California durable power of attorney for finances that springs into effect only when you cannot take care of your own finances.
Preparing a POA
When you decide to draft a POA, you want to be very careful that the language of the document defines exactly the authority you wish to confer. Since the person getting the power of attorney will be able to act on your behalf, be sure to define the authority very carefully and specifically.
A POA can be drawn narrowly or broadly. A broad grant of authority gives the agent the same power over your finances that you do. This makes sense if you intend the POA to serve in case you are incapacitated. Remember that a POA agent is legally obligated to act in your interests, not his own. It is a fiduciary duty, the highest level of duty that exists under the law.
Can you draft up a California durable POA yourself? You will find free power of attorney forms for California online, including the Uniform Statutory Power of Attorney set out in Probate Code 4401. However, it should be noted that these grant broad and sweeping authority. Consider working with an attorney before using a free online form to be sure the document reflects your needs and desires.
- The Law Office of Stephen C. Gruber: The California Durable Power of Attorney for financial purposes
- Nolo: Durable Financial Power of Attorney
- Sacramento Public Law Library: Power of Attorney
- Sacramento Public Law Library: California Statutory Power of Attorney
- Find Law: Durable Financial Power of Attorney
- Accounting and finances image by MAXFX from Fotolia.com