Power Of Attorney
A Power of Attorney or Durable Power of Attorney (DPOA) is a document that specifies who would be helping you make financial and property decisions. The person who you name in the Power of Attorney document to assist you is called your “Agent” or “Attorney in Fact”.
As a good estate planning attorney in Covina, I like to ensure that my clients understand the different ways that a Durable Power of Attorney may be drafted.
A Power of Attorney is typically drafted in one of two ways in regards to “effect”:
- Springing: Most clients want their Power of Attorney to be a “springing” document. This means that the Power of Attorney only takes affect when the person becomes incapacitated. “Incapacity” is generally defined as either being certified by two physicians or by court order. If a person becomes incapacitated, then financial and property management powers “spring” from that incapacitated person to the person of choice (“Agent” or “Attorney in Fact”).
- Immediate: Many of my older clients want help handling finances immediately even though that client still has capacity. If this is the case, an immediate Power of Attorney may be executed to give financial and property management power to that person of choice immediately.
Powers of Attorney are also drafted in two different ways in regards to “power”:
- General: A “general” Power of Attorney gives general powers to the chosen person to make financial and property decisions on behalf of someone else. This essentially means the chosen person is acting on your behalf in every regard in terms of finances and property management.
- Limited: A “limited” Power of Attorney only gives power to someone else in a limited sense. Most commonly, a person may give a limited power to another to assist with banking. If this is the case, a limited Power of Attorney may be drafted for the sole purpose of dealing with banking institutions.
Without a Durable Power of Attorney in place, an incapacitated person may be the subject of a conservatorship, which is a time-consuming and costly process that requires Probate Court supervision, which is why pre-planning with a Power of Attorney is so important.
For more information on Power of Attorney, read Power of Attorney- American Bar Association