As you get older, you may want to turn over some of your financial affairs to a trusted family member or professional to pay your bills, supervise your investments or any number of other financial tasks. In the alternative, you may feel that you are handling your finances just fine but want to make provisions in case you become incapacitated through a sudden illness. Financial power of attorney is different from power of attorney over your health, and in this article, we will discuss only financial power of attorney.
If you suddenly fall ill with no financial power of attorney, your bills could remain unpaid, your investments could be neglected and any money due you could go uncollected. The result could be damage to your finances that is unrecoverable.
Determine the Purpose of Your Financial Power of Attorney
- If you want an agent take over some or all of your financial responsibilities now, you probably want a durable power of attorney. You can have it take effect as soon as you sign it. However, be aware that in California, you must indicate that you want the power of attorney to be durable in order for it to continue should you become incapacitated.
- If you are fine taking care of your finances now but want to appoint someone to take them over should you become incapacitated, you want a “springing power of attorney”. Your document should indicate what event will trigger the springing power of attorney going into effect such as a doctor certifying you have become incapacitated.
If you do not have a financial power of attorney in place and become incompetent or incapacitated, your family will have to go to court to have an agent appointed. You cannot be certain that a court will appoint someone you would approve, so it’s better to plan in advance and appoint an agent of your own choosing.
Power of Attorney Does Not Have to Be Forever
As long as you are legally competent, you can always decide to rescind your power of attorney. In California, if you have granted your spouse durable power of attorney, it will be revoked if you get a divorce.
Who You Should Appoint as Your Agent
You must be legally competent to appoint an agent with power of attorney in California. You can appoint any adult you like as your, but of course you will want to appoint someone you trust. It’s common for people to appoint one of their children.
Whoever you appoint, you must sign the power of attorney document either before a notary public or two witnesses. If you will want your agent to handle real estate, be sure to have the power of attorney notarized and then have it recorded.
Consult with a California Estate Planning Attorney
If you have not granted power of attorney to an agent in the event you become incapacitated, you may want to consider calling an estate planning attorney for a consultation. They can discuss what provisions would best protect you and your finances. Locally, in Petaluma, California, Bridget can be contacted by clicking here.