General Power of Attorney California
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If you think that estate planning means having your lawyer draft documents, such as a will or trust, to ensure the orderly handling of the distribution of your estate in the event of your death, you are mistaken. Planning for death is only part of estate planning.
What happens if you suffer severe, disabling injuries in an accident and cannot get to the bank to handle financial matters, or you need someone to handle the sale or purchase of a home while you are out of town?
An estate plan should include a general power of attorney that gives someone you trust the authority as your agent to make all kinds of financial decisions and handle your financial and business affairs for you.
General powers of attorney are legal documents, so it pays to take a few minutes to learn what happens when you create one or are designated in one to act on behalf of another person.
The following offers an overview of the general power of attorney and what distinguishes it from the different types of powers of attorney available under California law.
What is a general power of attorney?
The person giving the authority is designated as the principal. The person receiving the authority or power to act is the agent or attorney in fact.
The terminology makes it easy to confuse “attorneys in fact” with “attorneys at law.”
Each of them has authority to act on behalf of another person, but attorneys in fact derive their authority from a power of attorney while attorneys at law hold law degrees and are admitted to practice law by the state.
A power of attorney permits children to handle an elderly parent’s personal affairs, including:
- Writing checks to pay bills.
- Handling transactions with stockbrokers or a brokerage firm, including authority to buy and sell stock.
- Signing an agreement or contract for the sale or purchase of a house and other types of real estate transactions.
If you have a business and must take time off or be away, a general power of attorney lets you designate another person to handle any business transaction that may require attention in the principal’s absence.
A general power of attorney does not permit an agent to make healthcare decisions for the principal. For that you would be an advance medical directive contacting a medical power of attorney.
A power of attorney as a temporary or permanent means of taking care of your financial and personal affairs when you cannot be there to handle them for yourself makes a useful tool.
There are, however, legal responsibilities and obligations connected with them that need to be understood as both a principal and agent.
What are the roles and responsibilities of a general power of attorney?
When you sign a general power of attorney designating one or more of your children, a relative or another person who you trust, you essentially let your agent step into your shoes with all of the legal authority that you possess over your personal affairs, bank accounts and other important matters.
Your agent owes a fiduciary duty to you, as the principal, which means acting solely in your best interest.
Agents must put their own interests aside when acting on behalf of a principal.
In return, you agree that as long as the agent acts within the scope of the authority granted in the POA document, third parties may rely upon the fact that agreements and transactions by the agent are with the approval and consent of you as the principal.
California law requires that agents keep property of their principal separate from their own. Agents may not transfer property belonging to the principal to themselves without there being specific authority for it in the POA document.
Do I need a lawyer to get a general power of attorney?
The law does not require that you have a lawyer prepare a general power of attorney or, for that matter, any of the other types of powers of attorney. However, as mentioned previously, a POA document involves legal rights and obligations for both an agent and a principal.
If you are considering signing a power of attorney, get advice from a lawyer before moving ahead with it. Make certain that you have a full understanding of the risks associated with giving authority to another person. A lawyer may offer you options, such as a limited power of attorney, to restrict the scope of the authority or when it can be exercised by the agent.
As an agent, a consultation with a lawyer may give you a better understanding of the responsibilities a power of attorney imposes and help you to decide whether or not to take them on. The lawyer may offer guidance about records to maintain to avoid breaching your fiduciary duties.
How do I get a general power of attorney?
Most lawyers in private practice in California include the preparation of powers of attorney. If you do not wish to have a lawyer prepare it for you, libraries throughout the state have information about preparing your own POA documents.
What is the difference between a general power of attorney and a durable power of attorney?
If you prepare a general power of attorney with one of your children named as the agent, it remains valid and in effect until you revoke it or die. However, the authority of your agent also ends in the event of your incapacity. A car accident that leaves you in a coma, or an illness, such as Alzheimer’s disease, that leaves you mentally incapacitated ends the right of the agent to act.
A durable power of attorney is a general power containing language authorized by a California statute that says the power of attorney remains in effect after incapacity of the principal. A durable power of attorney would be a better choice for an older principal or for someone in poor health.
Where do I get a general power of attorney form?
California general power of attorney forms may be found online at government websites where they can be accessed, downloaded and printed.
A power of attorney gives you the ability to have someone you trust handle important real estate, financial and matters for you when you are not available to handle them.
A POA document as part of a financial plan gives you peace of mind knowing that your spouse or children have means to handle financial and personal affairs on your behalf.