As our parent’s age, the realities of their mortality begins to sink in and many new questions start to arise. Questions such as “who will take care of their finances if they become incapacitated?” start to plague us. These important decisions can be overwhelming, but a special document can help to take away some of the pressure: A power of attorney.
A power of attorney is a document that designates an individual family member or close friend to act in their place should they be unable. The principal (the individual to whom this is concerning) must be in a clear mental state prior to selecting his or her agent. There are several types of power of attorneys in California. The two most common power of attorney documents are a durable power of attorney (for financial decisions) and medical power of attorney (for health-related decisions):
CA General Durable Power of Attorney
- Tangible Personal Property Transactions
- Real Property Transactions
- Tax Matters
- Claims & Litigation
- Retirement Plan Transactions
- Benefits from Governmental Programs or Civil or Military Service
- Stock & Bond Transactions
- Commodity & Option Transactions
- Banking & Other Financial Institution Transactions
- Business Operating Transactions
- Personal & Family Maintenance
- Estate, Trust & Other Beneficiary Transactions
- Insurance & Annuity Transactions
California Power of Attorney for Health Care
- Who is allowed access to medical records
- Treatments that you do or do not want to receive (e.g. whether to be kept alive by feeding tubes)
- Medicines that you do or do not want to receive
- Whether to admit or discharge you from a hospital
- Whether to admit or discharge you from a nursing home
Requirements for Filling Out the Power of Attorney(s)
Once you have decided on the proper power of attorney(s), it is important to fill out the forms with your parent or parents. Prior to filling out the forms and signing, it is important to discuss what it is that they want and what you may be concerned about. Then you may fill out the forms and sign them. To be legally valid, you must have a witness and the forms need to be signed by either two other people or a notary public. It’s important to keep the original in a safe place that you can remember and to make copies for yourself as well as your agent(s). The power of attorney is effective immediately upon being signed and witnessed. However, the principal in question still maintains the right to manage their own issues unless they are to become unable.
Power of Attorney Documents are Revocable
Should the principal (in this case your parent or parents) believe the agent (you) to be acting inappropriately, (e.g. stealing funds), the document can be revoked by filling out another document and distributing it to your agent and any third parties involved (e.g. doctors and banks).
Additionally, the principal should enable the agent to gain access to his or her bank accounts (by authorization and signature card). However, the agent may only withdraw funds for the benefit of the principal.
Though each state behaves differently if you do not have a power of attorney the court will step in. This can prove time-consuming, emotionally draining, and costly.
For more information about creating a power of attorney document or other life estate planning questions or concerns, contact the experienced estate and business planning attorneys of GM Group, PC at 805-892-2201 today.
Posted in: Estate Planning