Download Making a Financial Power of Attorney in California

Making a Financial Power of Attorney in California
Know what a California financial power of attorney can do for you.
Why do I need a California financial power of attorney?
If you become ill or injured and you can't take care of your own finances, someone else must step
in to help. With a financial power of attorney, you name a trusted person to pay bills, make bank
deposits, watch over investments, collect insurance or government benefits, and handle other
money matters on your behalf. Without this important document, your loved ones will have to go to
court to get authority over your financial affairs.
Who makes financial decisions for me under a California financial power of
attorney?
In California, the person you name to make decisions for you is called your agent. Any competent
adult can serve as your agent; the person most definitely doesn't have to be a lawyer. Honesty,
common sense, and dependability should be the most important factors in your decision. It's also
wise to choose someone who lives nearby—this will make it easier to take care of practical tasks.
When does my financial power of attorney take effect?
In California, you can draft your financial power of attorney so that it takes effect as soon as you
sign it. You must specify that you want it to be "durable." If you don't, it will automatically end if you
become incapacitated.
If you don't want to make an immediately effective document, you can state that your power of
attorney will not go into effect unless a doctor certifies that you have become incapacitated. This is
called a "springing" durable power of attorney.
When does my financial power of attorney end?
A durable power of attorney automatically ends at your death. It also ends if:
 You revoke it. As long as you are mentally competent, you can revoke your document at any
time.

You get a divorce. In California, your durable power of attorney is automatically terminated if
your spouse is your agent and you get a divorce. As a practical matter, it is always wise to
make a new power of attorney as soon as you file for divorce.

A court invalidates your document. It's rare, but a court may declare your document invalid
if it concludes that you were not mentally competent when you signed it, or that you were the
victim of fraud or undue influence.

No agent is available. To avoid this problem you can name an alternate agent in your
document.
Do I need a lawyer to make a financial power of attorney in California?
You usually don't need a lawyer to prepare a durable power of attorney for finances. In fact, state
governments have designed these forms for people to complete on their own by filling in the
blanks. You can find a form for California in Nolo's Quicken WillMaker Plus software, including
detailed instructions for completing your document and making it legal in California.
Financial Power of Attorney Forms and More Information
This article can be found along with more information about this topic at the Nolo Press website:
www.nolo.com.
Last updated on 11/19/07. by: Shae Irving, J.D.
Durable Financial Power of Attorney: How it Works
The durable financial power of attorney is a simple way to arrange for someone to handle
your finances.
A durable power of attorney for finances -- or financial power of attorney -- is a simple,
inexpensive, and reliable way to arrange for someone to manage your finances if you become
incapacitated (unable to make decisions for yourself).
A financial power of attorney is a good document to make for yourself, but it can also be a great
blessing for your family. If you become unable to decide for yourself and you haven't prepared a
durable power of attorney, a court proceeding is probably inescapable. Your spouse, closest
relatives, or companion will have to ask a court for authority over at least some of your financial
affairs.
When a Financial Power of Attorney Takes Effect
A financial power of attorney can be drafted so that it goes into effect as soon as you sign it. (Many
spouses have active financial powers of attorney for each other in case something happens to one
of them -- or for when one spouse is out of town.) You should specify that you want your power of
attorney to be "durable." If you don't, in most states, it will automatically end if you later become
incapacitated.
Or, you can specify that the power of attorney does not go into effect unless a doctor certifies that
you have become incapacitated. This is called a "springing" durable power of attorney. It allows
you to keep control over your affairs unless and until you become incapacitated, when it springs
into effect. Again, you must specify that you want your power of attorney to be "durable." If you
don't, in this case, your document will never take effect at all.
Your Agent's Job
When you create and sign a durable power of attorney, you give another person legal authority to
act on your behalf. This person is called your agent or, in some states, your attorney-in-fact.
Commonly, people give their agent broad power to handle all of their finances. But you can give
your agent as much or as little power as you wish. You may want to give your agent authority to do
some or all of the following:
 use your assets to pay your everyday expenses and those of your family

buy, sell, maintain, pay taxes on, and mortgage real estate and other property

collect Social Security, Medicare, or other government benefits

invest your money in stocks, bonds, and mutual funds

handle transactions with banks and other financial institutions

buy and sell insurance policies and annuities for you

file and pay your taxes

operate your small business

claim property you inherit or are otherwise entitled to

transfer property to a trust you've already created

hire someone to represent you in court, and

manage your retirement accounts.
The agent is required to act in your best interests, maintain accurate records, keep your property
separate from his or hers, and avoid conflicts of interest.