Powers of Attorney
A power of attorney lets you name someone to manage your finances if you cannot manage them yourself. Along with a living trust and an advance health care directive, it is one of the documents that protects you during your lifetime rather than after your death.
What is a power of attorney?
It is a document in which you — the principal — give another person authority to act on your behalf in financial and legal matters. The person you name is your agent, sometimes called an attorney-in-fact, though they need not be a lawyer.
Depending on how it is written, your agent may be able to pay your bills, manage your bank accounts, deal with your insurance, file your tax returns, or handle real estate transactions.
Why do I need one if I have a living trust?
Because a trust only controls the assets you put into it.
A living trust lets your successor trustee manage trust property if you become incapacitated. But some things are rarely held in a trust — retirement accounts, vehicles, and anything you acquired but never transferred in. Your trustee has no authority over those.
A power of attorney covers the gap. Most estate plans include both, and they are designed to work together.
What happens if I don't have one?
If you become unable to manage your finances and no one has authority to act for you, your family must apply to the court to have a conservator appointed.
That process is public, costs money, and takes time — during which bills may go unpaid and decisions go unmade. Once the court is involved it generally stays involved, with continuing supervision and reporting, until you recover or die.
A power of attorney avoids all of it, for the cost of a document prepared in advance.
What is a durable power of attorney?
A standard power of attorney ends if you become incapacitated — which is precisely when you would most need one.
A durable power of attorney remains effective through incapacity. California law requires specific language to achieve this, which is why the distinction matters and why the document should be prepared properly rather than filled in from a form.
For estate planning purposes, the durable version is almost always the one you want.
When does my agent's authority begin?
You choose.
The authority can take effect immediately, so your agent can act as soon as the document is signed. This is simpler in practice and is what most people choose, on the basis that you would only name someone you trust with that authority now.
Or it can be springing, taking effect only when a specified event occurs — typically a determination by one or more physicians that you can no longer manage your own affairs. This appeals to people uncomfortable with handing over authority before it is needed, but it introduces a practical difficulty: your agent must prove the triggering event has happened before a bank will deal with them, and that can cause delay at exactly the wrong moment.
We can talk through which suits your circumstances.
Can I limit what my agent can do?
Yes. A power of attorney can be broad or narrow.
A general power of attorney gives your agent authority over your financial affairs as a whole. A limited or special power of attorney confines them to defined tasks — selling a particular property, or managing one account — and is often used for a single transaction rather than for long-term planning.
You can also exclude specific powers. Authority to make gifts of your property, for instance, is not included by default and must be granted expressly.
Who should I name as my agent?
Someone you trust completely, and someone able to handle the practical work involved.
Your agent has a fiduciary duty: they must act in your interests rather than their own, keep your property separate from theirs, maintain records, and avoid conflicts of interest. That is a genuine legal obligation, but it is enforced after the fact — which is why the choice of person matters more than the drafting.
Name at least one alternate, in case your first choice is unable or unwilling to serve when the time comes.
Can I change or revoke it?
Yes, at any time while you have capacity. Revocation should be in writing, and you should notify your agent and any bank or institution that has been relying on the document.
Powers of attorney are worth reviewing after a marriage, a divorce, a death in the family, or a move to another state.
What about medical decisions?
A financial power of attorney does not cover health care. In California, medical decisions are handled by a separate document — an Advance Health Care Directive.
Most estate plans include both. See our Advance Health Care Directives page.
How we can help
A durable financial power of attorney is included in every full estate plan we prepare. We can also prepare one on its own, or a limited power of attorney for a specific transaction.
We offer a free initial consultation.
Call 707.636.4611 or email info@botzcodylaw.com.