A Durable Power of Attorney Provides Security in Knowing that Someone Trusted Will Be Able to Make the Important and Difficult Decisions that Affect Property and Health Care Should Incapacity Occur
Planning for the potential that you will not be able to make decisions regarding your own property or health care is a scary prospect. A power of attorney provides assurance that someone you trust is legally able to make those hard and important decisions on your behalf when you no longer can.
Power of Attorney Defined
A power of attorney is a document in which a person, the principal, grants another person, the attorney-in-fact or agent the power to act on behalf of the principal. A principal may grant as much or as little authority to an attorney-in-fact with regards to any lawful purpose. Typically, people choose to execute a power of attorney in order to grant authority to make decisions regarding the principal’s property or health care. A power of attorney is generally considered an essential part of an estate planning package because it gives the principal the freedom and security to designate a person of their choosing to make the necessary and important decisions regarding their property or health care in the immediate future or in the unfortunate event that the principal becomes incapacitated.
Durable Vs. Nondurable Power of Attorney
A power of attorney can be either durable or nondurable. A nondurable power of attorney grants authority to the attorney-in-fact that terminates immediately upon the incapacity of the principal. It may also be revoked at any time by the principal. A power of attorney becomes durable when specific language is inserted into the document that continues the authority after the principal becomes incapacitated. Specific language in the document is also needed if the principal wishes to make the durable power of attorney effective only in the event that the principal becomes incapacitated. When planning an estate, most people consider a durable power of attorney in order to plan for the possibility that they may not be able to make their own decisions regarding property or health care in the future.
Why most people choose a durable power of attorney
1. Maintain continuity in asset/property management
Most people choose a durable power of attorney when planning their estate in order to ensure that property and assets are continuously managed in the event that the principal becomes no longer able to manage them. A power of attorney allows the attorney-in-fact to make decisions regarding the property owned or subsequently acquired by the principal including the acquisition of property on behalf of the principal. Most married couples assign their spouse as their agent and other family or friends can be designated as successor agents in the event the agent is not available. A power of attorney executed in California may also extend to property that is not located in California, making it easier to control all property with one document.
California also statutorily provides for what is called a special power of attorney, also known as a limited power of attorney. A special power of attorney restricts authority to a specific time period or to a specific transaction. A principal who may be unavailable to handle a purchase/sale transaction generally utilizes a special power of attorney. Because of the limited nature of a special power of attorney, incidental authority necessary to carry out the property authority is granted in the document.
2. To appoint a person to make important health care decisions
In 2000, California passed what is known as the Health Care Decisions Law. This law recognizes that adults have the fundamental right to control decisions relating to their own health care. This law applies to durable powers of attorney for health care as well as advanced health care directives. In an advanced health care directive, a principal may authorize consent to certain procedures or elect not to receive certain treatments in an incapacitated state. It is important to note that an advanced health care directive is different than a durable power of attorney for health care that authorizes another to act on behalf of the principal. Advanced health care directives will be discussed in a later blog post.
A power of attorney for health care designates a person to make health care decisions for the principal. An attorney-in-fact under this instrument is authorized to make only health care decisions. According to California law, a health care decision includes selecting health care providers and facilities, approving and disapproving of tests, procedures and medications and directing any other provision, treatment, or service to maintain the principal’s physical or mental health.
A power of attorney for health care is advantageous to those seeking a cost-effective tool to plan for potential incapacity. It allows a client to choose a trusted individual to manage health care decisions while offering the security that their health care preferences will be honored. Some drawbacks to a power of attorney for health care decisions include possible exceeding of authority, tedious court supervision and failure to act. A power of attorney for healthcare does not provide for the more sophisticated planning that may become necessary for long-term incapacity requiring coordination of assets and benefits.
Clients should discuss all preferences, concerns and options available under a power of attorney with a lawyer in order to achieve their desired goals.
Max Alavi focuses on assisting clients establish effective and secure vehicles for passing their assets to their loved ones and protecting their families from the uncertainty and expense associated with probate and testamentary guardianship matters. He is also dedicates a significant portion of his practice to complex probate matters, trust administration and litigation of contested trusts.
Max Alavi, Attorney at Law, APC has 6 locations in Orange County and Los Angeles County, California