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Brian Neil Burg, Esq.
Fullerton, California

(714) 525-1134

BNBurg@BrianNeilBurg.com

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ESPERANTO PAROLATA
 
POWERS OF ATTORNEY
 
Power of Attorney — Definition and Terminology
  
 

A "power of attorney" is a document that assigns a person or persons to step into your shoes and make legal decisions on your behalf in the same way that you would if you could.  You are known as the "principal," and the person acting on your behalf is known as the "agent" or "attorney-in-fact."

A power of attorney may be completely general or very limited in its scope.  It may be durable or nondurable.  It may be take effect immediately or only upon the happening of a contingency (sometimes referred to as a "springing" power).

It is important to realize that a power of attorney is only effective while you are alive.  All powers of attorney terminate upon the death of the principal.

General vs. Limited Powers — A General Power of Attorney gives broad powers to your attorney-in-fact (aka, your "agent"), but you can limit such power as much as you want.  If your power of attorney is not a general one, then it is a Limited Power of Attorney.  Such documents are often used to grant temporary powers to a specific individual to step into your shoes when you cannot be there.  For instance, you can have a limited power of attorney drafted to allow your best friend to sign for you on an important contract during a time when you will be out of the country, or to buy or sell stocks or transfer funds between banks, or otherwise act as you would act if your physical presence is required but you are unavailable.

Durable vs. Nondurable Powers — A durable power of attorney is a document that endures your incapacity, that is, it stays in effect indefinitely—either until you die, or until you recover sufficiently to regain control over your own affairs.  A power of attorney that is not "durable" terminates either when you become incapacitated or on a fixed date or upon some other contingency specified in the document.

Immediate vs. Springing Powers — A power of attorney is effective when signed by the principal and accepted by the agent, unless it is written to take place sometime in the future based on some event (the "contingency").  Because powers of attorney are very powerful documents in that they can give substantial powers to somebody other than yourself, many are written to not go into effect until you become incapacitated, often as determined by your family physician or based upon some other criterion.  Such powers of attorney are called "springing" powers, because they spring into action upon the occurrence of a specified event.

With respect to general estate planning, there are two primary types of powers of attorney which are especially valuable: the Durable Power of Attorney for Health Care (often included as part of an Advance Directive and discussed on the previous page of this website) and the Durable Power of Attorney for Asset Management discussed below.

 
Durable Power of Attorney for Asset Management
  

If you are incapacitated, who will pay your bills, look after your home, do your banking?  With a Durable Power of Attorney for Asset Management, you can specify whom you want to be in control.

Usually a Durable Power of Attorney for Asset Management is a general power and often a springing power.  As a general power, it designates someone who can enter into just about any transaction that you yourself could enter into.  That would include managing bank accounts (including open and closing accounts, making deposits and withdrawals, and other banking transactions); using your credit cards; entering into real estate transactions; and, in short, handling all your financial and asset management transactions as if your agent were you.  Of course, the agent is obligated to act solely on your behalf and not on his or her own behalf.  However, assigning such powers should not be taken lightly, and only a truly trusted family member or friend should be designated as your agent.

As a springing power, your agent would not have any authority to represent you until a defined contingency were to take place—typically, until you are incapacitated and unable to handle your own affairs.

Special Note Regarding Banks and Other Financial Institutions — Even though a properly executed and notarized power of attorney is valid and enforceable in California, many institutions are reluctant to recognize such a document without going through their legal departments and/or a letter from an attorney.  Usually they have their own "Power of Attorney" form that they want the principal to sign. In practice, if it appears that there is an imminent need for a power of attorney, hassle can sometimes be avoided by the principal signing the institution's own form in advance, if possible—though care should be taken that an appropriate agent is selected who will not abuse his or her position in advance of the true necessity of his or her services.

Revocability — All powers of attorney are revocable by the principal at any time, except that a durable power of attorney will not be revocable during any period in which the principal is incapacitated.


The information presented on this website is not intended to be a source of legal advice or a comprehensive explanation of the law. You should not act upon or rely on information at this or any other website without the advice of a competent California estate planning attorney, especially if you reside outside the State of California, where we are not licensed to practice law and do not give legal advice. This website is intended for educational and informational purposes only.