I Am a Power of Attorney in California, Now What?

You’ve been named as someone’s agent under the Power of Attorney in California – congratulations on being trusted with this important role! It’s a big responsibility, but it doesn’t have to be overwhelming.

At Desert Law Group, we understand that stepping into this position can feel a bit daunting, and we’re here to guide you through what it all means.

Throughout our many years helping Californians with estate planning, we’ve always kept one thing at the forefront: making sure you’re well-equipped to handle your new duties and obligations with confidence.

In this article, we’ll walk you through what a Power of Attorney is, your responsibilities, and the steps you should take to get started.

What is a Power of Attorney?

A Power of Attorney (POA) is a legal document that allows one person (the principal) to give someone else (the agent or attorney-in-fact) the authority to make decisions on their behalf.

It’s essentially a way for someone to ensure their wishes are carried out, especially if they become unavailable or unable to make decisions for themselves.

However, it’s important to note that having a POA doesn’t mean the principal loses their ability to make their own decisions.

As long as they’re still capable, they can continue to manage their affairs alongside or independent of the agent.

Understanding Your Responsibilities

As the agent, your role comes with a lot of trust. You’ll be responsible for handling the tasks outlined in the Power of Attorney document. These can range from managing finances to making healthcare decisions. It all depends on the type of POA in place.

Types of Powers of Attorney

There are different types of POAs, each designed for specific situations. Here’s a quick breakdown:

General Power of Attorney

A General POA gives you broad authority to manage financial and legal matters. This could mean paying bills, managing investments, handling business transactions, and more. It typically ends if the principal becomes incapacitated.

Durable Power of Attorney

A Durable POA stays in effect even if the principal becomes incapacitated, which makes it especially important for situations where the person may not be able to make decisions due to illness or injury.

Medical Power of Attorney or Advance Healthcare Directive

A Medical POA, which is called Advance Healthcare Directive in California, is specifically for healthcare decisions. You’ll be responsible for making medical treatment decisions for the principal if they can’t communicate their wishes.

Limited Power of Attorney

This type of POA only gives you authority over specific tasks or situations. For example, you might be responsible for selling a property or handling business matters while the principal is out of the country.

Scope of Authority

Your authority as a POA depends on the specific tasks laid out in the document. For example, if you have a financial POA, you may be responsible for managing bank accounts, paying bills, or selling property.

If you have a medical POA, your role may involve making healthcare decisions, like consenting to surgery or choosing treatment options.

Fiduciary Duty

As a POA, you have a fiduciary duty to act in the principal’s best interests. This means you need to:

• Put their needs first
• Act carefully and responsibly
• Follow their instructions
• Keep accurate records of your actions
• Maintain confidentiality about their personal and financial information

Comparison Table

 

Type of Power of Attorney	Purpose	Key Roles/Authority	Party Involved
General Power of Attorney	Broad authority over legal, financial, and business matters	Managing bank accounts, paying bills, entering contracts, managing property	Principal & Agent
Durable Power of Attorney	Continues during the principal’s incapacitation	Same as General POA but remains valid if the principal becomes incapacitated	Principal & Agent
Medical Power of Attorney	Authority to make healthcare decisions	Making medical decisions, selecting healthcare facilities, consent for treatment	Principal & Agent
Limited Power of Attorney	Authority for specific tasks or time periods	Specific duties like selling a property or handling transactions	Principal & Agent

 

Key Steps to Take

Now that you’ve accepted the role, it’s time to get organized. Here are a few things you’ll want to do right away.

Gather Important Documents

Having access to the principal’s key documents is critical to doing your job effectively. Here’s a list of what you might need:

• Will and trust documents
• Financial account statements
• Insurance policies
• Medical records and medication list
• Property deeds
• Tax returns
• Contact information for doctors, lawyers, financial advisors, and accountant.

Create an Inventory

Next, create a detailed list of the principal’s assets and liabilities. This might include:

• Bank accounts
• Investment and retirement accounts
• Real estate properties
• Vehicles and personal property
• Outstanding debts, like mortgages or loans

Understand Healthcare Decisions (If Applicable)

If you hold a Medical POA, you’ll need to familiarize yourself with the principal’s healthcare wishes. This could involve reviewing their living will or healthcare directive. You may also need Medical HIPAA authorization to access their medical records.

Financial Management

If your POA covers financial matters, it’s important to stay on top of things like paying bills, managing investments, and filing taxes. You might want to consider setting up automatic payments for bills to make things easier.

Potential Challenges and How to Address Them

Being a POA can come with its fair share of challenges. Here’s how to tackle a few common ones:

• Family Disagreements: Open communication can help resolve conflicts. If family members disagree about decisions, it might be helpful to schedule a meeting where everyone can voice their concerns.
• Managing Complex Finances: If you feel overwhelmed by the financial aspects of your role, don’t hesitate to consult with a financial advisor.
• Making Tough Healthcare Decisions: It’s always a good idea to consult medical professionals and lean on any directives left by the principal to guide your choices.
• Capacity Questions: If you’re concerned about the principal’s mental capacity to make their own decisions, seek guidance from medical professionals. A doctor can assess their cognitive abilities and provide an official evaluation.

Legal Compliance and Record-keeping

As a Power of Attorney, you’re expected to follow California laws and keep detailed records of your actions.

California Laws

California has specific requirements for POAs. For example, certain types of POAs need to be notarized or even recorded. It’s also important to follow any limitations outlined in the document.

Record Keeping

Keep detailed records of all financial transactions, healthcare decisions, and any communications with family members or professionals. Having this documentation can help avoid misunderstandings down the line.

What if I Create a Power of Attorney and Later the Court Appoints a Conservator?

If a court appoints a conservator for the principal, your role as the POA may change. You’ll need to inform the conservator about any actions you’ve taken, and the court may limit or end your authority.

Termination of Power of Attorney

Understanding when and how a POA terminates is important so that everyone involved knows when the agent’s authority is no longer valid.

When Does a Power of Attorney End?

A Power of Attorney can end in a few different ways:

• Revocation by the Principal: The principal can cancel the POA at any time, as long as they are still mentally capable, by putting it in writing.
• Death of the Principal: Once the principal passes away, the POA automatically becomes invalid.
• Court Order: A court can decide to terminate the POA if some legal reasons or disputes require court intervention.
• Agent’s Unavailability: If the agent can no longer serve, whether due to incapacitation, death, or stepping down, the POA may end unless a successor agent is named.

How to Revoke or Change a Power of Attorney

If the principal wants to revoke or modify the POA, here’s how it works:

• Written Statement: The principal needs to create a written document clearly stating their intent to revoke or change the POA.
• Notification: After the revocation, the principal (or someone acting on their behalf) must notify everyone who has a copy of the POA—like banks, healthcare providers, or any other relevant institutions.
• New POA (Optional): If the principal wants to appoint a different agent or adjust the scope of the agent’s authority, they can create a new POA document to reflect those changes and revoke the prior POA.

Ethical Considerations

As a Power of Attorney, your role comes with a strong ethical obligation to act in the best interests of the principal. This trust requires you to avoid any actions that could lead to conflicts of interest or misuse of authority. It’s essential to:

• Avoid Self-Dealing: Do not use your position for personal gain or make decisions that benefit you at the expense of the principal.
• No Unauthorized Gifts: You are not permitted to give away the principal’s assets unless explicitly allowed in the POA document.
• Respect the Estate Plan: Always ensure that your actions align with the principal’s overall estate plan, protecting their wishes for the future.

Can I Cancel or Change My Power of Attorney?

Yes, the principal can revoke or modify a Power of Attorney at any time, as long as they are mentally capable. The process involves:

• Written Statement: The principal must draft a written statement indicating their desire to revoke or change the POA.
• Notification: Once the POA is revoked, the principal must notify relevant institutions like banks, financial institutions, or healthcare providers that the POA has been canceled or changed.

What Can I Do if There is a Dispute About a Power of Attorney?

Disputes about a Power of Attorney can arise, and it’s important to handle them calmly and professionally. Some ways to resolve conflicts include:

• Communication and Negotiation: Often, simply talking through concerns with involved parties can lead to a resolution.
• Mediation: In more complicated disputes, a neutral third-party mediator can help all sides come to an agreement.
• Court Intervention: If the dispute can’t be resolved, legal action may be necessary, and a court can step in to settle the issue or even terminate the POA if needed.

Need Help With Your Role as Power of Attorney in California?

Desert Law Group is here to help you go through your responsibilities. If you have any questions or need guidance, contact us today for a consultation. We’re here to ensure you feel supported every step of the way.

Call Desert Law Group at 760-239-5661 for personalized assistance.