TOO many times, I encounter relatives or friends going through the dilemma of not being able to handle an elderly relative’s financial, legal, and medical affairs after such relative becomes incompetent or disabled.
Often understated and unrealized is the paramount importance of a Power of Attorney. Most people recognize the need for it when it is too late.
THE power of attorney is perhaps the most important tool a person needs to protect financial interests if there comes a time when an individual is not able to act. Signing a power of attorney is absolutely critical to ensure a person’s future independence in the event of illness or incapacity. Without it, one risks having his or her affairs managed by a court-appointed guardian, possibly a stranger, under court supervision and often without the ability to have any input. In other words, the person literally loses financial control. The power of attorney is the cornerstone of a financial management plan. It ensures that a person’s wishes will be respected if there comes a time when he or she is unable to act. It is a written document whereby someone is appointed to manage that person’s financial affairs in the event of illness or incapacity.
The person executing the power of attorney (called the “principal”) appoints another (called the “attorney-in-fact,” “proxy,” or “agent”) who, through this legal document, is empowered to manage the principal’s financial affairs. The attorney-in-fact can be a spouse, a child or someone else. That designated person can pay bills, make banking and brokerage account transactions, and even bring a lawsuit. Generally the power of attorney spells out in detail the specific powers that the attorney-in-fact will have.
Powers of attorney are governed by state law, which determines the process required for executing a valid power of attorney, the powers that may be granted to the attorney-in-fact, and other provisions concerning validity and duration of a power of attorney. When you create and sign a power of attorney, you give another person legal authority to act on your behalf. This person is called your “attorney-in-fact” or, sometimes, your “agent.” The word “attorney” here means anyone authorized to act on another’s behalf; it’s most definitely not restricted to lawyers.
A “durable” power of attorney stays valid even if you become unable to handle your own affairs (incapacitated). If you don’t specify that you want your power of attorney to be durable, it will automatically end if you later become incapacitated.
So when you think about creating one after incompetence or disability, as the case in most, it would be too late.
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Evangeline is a California registered tax preparer, a legal document assistant for the general public, and a freelance paralegal offering assistance to various attorneys. She can be reached at her office at 2451 Colorado Blvd. #2, Eagle Rock, CA 90041 or at her marketing location inside the Eagle Rock Plaza. Her phone number is (323) 550-1869 or you can check her website at: www.evangelinegiron.net. She is a member of the court-endorsed California Association of Legal Document Assistant (CALDA) and an Associate Member (Non-attorney) of the LA County Bar Association (LACBA).
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Note: Evangeline is not an attorney nor does she provide legal advice. She is a bonded and registered Legal Document Assistant and prepares legal documents per the specific direction of clients.