To account for unforeseen circumstances, California residents should consider preparing a durable power of attorney (POA). A durable POA is a legal document that grants an individual, known as the “principal,” the authority to appoint someone else, the “agent” or “attorney-in-fact,” to make financial, legal and other important decisions on their behalf in case they are unable to act on their own. This legal arrangement plays a vital role in ensuring the smooth management of affairs and protecting the principal’s interests during challenging times.
Durability
The key characteristic that distinguishes a durable power of attorney from regular powers of attorney is its durability. While a standard power of attorney becomes invalid if the principal becomes incapacitated or mentally incompetent, a durable power of attorney remains in effect even under such circumstances, continuing to empower the appointed agent to act on behalf of the principal.
Powers granted
The powers granted in a durable power of attorney can be broad or limited, depending on the principal’s preferences and the specific language in the document. Common powers a durable power of attorney can grant the agent include handling financial matters such as banking, investing, paying bills, managing real estate and making tax-related decisions. It can also extend to making medical decisions if the document authorizes that.
Drafting a durable power of attorney
Drafting a durable power of attorney requires careful consideration. You must choose a trustworthy and responsible individual as an agent, someone who will act in your best interests and adhere to your wishes.
Benefits
In cases of sudden illness, accident or mental decline, having a designated agent can prevent the need for a court-appointed conservatorship, which can be time-consuming, expensive and emotionally draining. With a durable power of attorney in place, the principal can have peace of mind knowing that their financial and personal affairs are in capable hands.
Potential drawbacks
While a durable power of attorney offers significant advantages, it also comes with inherent risks. Granting someone else control over one’s affairs requires trust and careful consideration. It is imperative to regularly review and update the document as circumstances change, and to discuss the implications with family members to avoid potential disputes in the future.