In California, a power of attorney for finance is a fantastic way to protect yourself when you can’t manage your finances yourself. It gives your agent the power to do your banking, pay bills, and access finances, for example. If you are in the hospital or stuck in the house, your agent can manage things for you until you are well again. To learn more about this tool, I highly recommend you check out our blog: Sign Credit Card Transactions with Power of Attorney.
Power of Attorney: When is it Effective?
A power of attorney can start immediately or at a later date. A “springing” power of attorney means that the power “springs” into being by a triggering event. Usually that triggering event is when two separate doctors write a letter that states the person has lost capacity. When we draft estate plans for a married couple we grant immediate power of attorney to the spouse. This makes sense – your spouse has a duty to protect the community assets. But what if you’re unmarried or your spouse is ill? What happens to you if you are very sick, but still have capacity?
Immediately Effective Power of Attorney
Given the Covid-19 outbreak, we recommend that most singles and people who are in a higher risk group give immediate power of attorney to someone they trust if they understand the following:
- Power of attorney is always revocable. If you grant your agent immediate power of attorney you can always revoke it later.
- You can limit the power. You can grant a limited power immediately while saving other powers for later. You can grant an immediately effective power to do your banking, but leave out the power to manage your business.
- You don’t have to give the document to your agent right away. Just because you created a power of attorney doesn’t mean you have to hand the document over right away. You can always leave the document in an envelope and have it ready for use later. Keep in mind: this only helps if you have time to tell someone where the documents are!
- A power of attorney document requires proper execution. Under California Probate Code Sec. 4121, a power of attorney must be either notarized or witnessed by two people, neither of which is your agent (attorney in fact). Cal. Prob. C Sec 4121 Therefore, it takes a little bit of planning to actually create a power of attorney document. Advice of an attorney is strongly recommended.
- Only give power to someone you absolutely trust. A power of attorney is typically very broad and sweeping authority. Don’t give it to a boyfriend you’ve known for 9 months. Consider children, a close relative, or a childhood best friend that you absolutely trust.
Use Power of Attorney during Covid-19
If you don’t have an estate plan, there isn’t a better time to get one. At the very least, use power of attorney documents to protect yourself in case you get sick. For a free power of attorney form, visit our downloads page or click here. To get more information about our estate planning services, including our Good, Better, and Best plans, call our office or book online for a free 20-minute consultation.