Even if no one particularly likes to think about what will happen if they became ill, injured or unable to take care of their business affairs and/or medical care, thinking ahead is the only prudent way to make sure your wishes will be respected.
A power of attorney is a written authorization to represent or act on another’s behalf in private affairs, business or legal matters. The person authorizing the other to act is called the Grantor or Principal and the person authorized to act is called the Agent.
The power of attorney gives you the possibility of naming a trusted person that will step in and make financial decisions on your behalf if you were to become ill, injured or simply unable to deal with your own finances or legal affairs. This document will also prevent your family from having to go to court to get authority over your affairs.
The person that you designate to be your agent can be any competent adult that you trust, preferably one who lives nearby to make logistics easier. It is always preferable to designate an alternate agent in case the first agent you nominated is not available.
You also have the possibility to only do a power of attorney for a specific matter like dealing with your shares in a company (referred to as a “limited power of attorney”). A “general power of attorney” will authorize your agent to act on you behalf with everything that you may act on.
You also have the possibility to appoint someone you trust to be your health care agent, to make any health care decisions for you in case you become incapacitated; this is also called an Advanced Health Care Directive.
In California, you have the possibility to decide whether you want your power of attorney to be effective right away or not.
If you decide that your power of attorney will take effect as soon as you sign it you have to make sure to make a “durable” power of attorney so it doesn’t automatically end when you become incapacitated.
If you have no desire to make the document immediately effective, you will state that the power of attorney will become effective if a doctor certifies that you have become incapacitated.
Concerning the power of attorney for health care, it will only become effective if you become unable to express your health care wishes yourself.
Any power of attorney automatically ends at your death but can also end if you revoke it; if your spouse was your agent and you get a divorce; if a court invalidates your document (rare, but the court can conclude that you were not mentally competent when you signed the document or in the case of a power of attorney for health care, if someone believes that the healthcare agent is not acting according to your wishes); or if your agent is not available.
Don’t hesitate to set up consultation with us if you have any further questions!