Durable Power of Attorney for Property

What is a California Financial Power of Attorney?

A power of attorney for property provides for the designation of an agent to transact financial transactions for another person. The power of attorney can be used to access bank accounts in the name of the person executing the document, who is known as the principal. If authorized under the document, it can also be used to open and close bank and brokerage accounts, selling stocks or real estate, or accessing annuities and retirement accounts. The agent under a power of attorney may also have the power to obtain information, open, close, modify or otherwise deal with accounts with life insurance companies, credit card issuers, utility companies or the human resources departments at employers.

When Does a Power of Attorney Become Effective?

The power of attorney can be drafted to be immediately effective, or it can be effective only upon the disability of the principal. In the event the power of attorney is to become effective only upon disability, there must be a mechanism to establish disability of the principal, such as certifications from two physicians familiar with the principal’s situation. Another alternative is to designate a disability panel consisting of an odd number of trusted individuals, a majority of who must designate the inability to handle financial affairs before the power of attorney becomes effective. This process is not necessary if the power of attorney is immediately effective.

How to Obtain a Power of Attorney

Powers of attorney can be obtained from an elder law attorney. They can also be obtained from paralegal services, software, internet services and pre-printed forms. All these forms may be legally enforceable documents the content of which varies substantially. The California legislature has also created a statutory form under Probate Code Section 4401. Because of the substantial variance in the content, it is possible one power of attorney may be effective to handle a financial transaction in the event of disability while another power of attorney may be ineffective. If a power of attorney is not effective, a conservatorship may be necessary.

Designating an Agent

Powers of attorney are a very important component of a comprehensive estate plan, but they are also the mechanism of substantial elder financial abuse. Therefore, it is critically important that the principal uses great diligence in designating an agent. Many persons simply designate their oldest child, which is not always the best planning option. It is often prudent to designate a non-family member, perhaps even a professional fiduciary, rather than a family member to serve as agent. Other methods to reduce the possible of financial abuse may be to provide for annual accountings to designated third parties or to employ co-agents (a strategy that our law firm does not generally favor).

To schedule a complimentary one hour consultation with one of our elder law and estate planning attorneys at our Riverside law office, call 951-787-7711 or contact us online.

Dennis M. Sandoval, A Professional Law Corporation, of Riverside, California, provides representation throughout Riverside, Corona, Norco, Moreno Valley, Eastvale, Jurupa Valley, Mira Loma, Redlands, Ontario, Rancho Cucamonga, Upland, Chino, Chino Hills, San Bernardino, Fontana, Rialto, Colton, Perris, Hemet, Sun City, Temecula, Murrieta, Menifee, Winchester, San Jacinto, Lake Elsinore, Idyllwild, Lake Arrowhead, Crestline, Running Springs, Wrightwood, Yucaipa, Palm Springs and Palm Desert.

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