California Financial Power of Attorney
A California Financial Power of Attorney (“POA”) is a document that gives a third party, also known as your “Agent,” the legal authority to make certain financial decisions on your (the “Principal’s”) behalf.
A very common question is, “Can my Agent due illegal things, like go against my will? While it would certainly be illegal, and difficult, to act against the specific authorities that are written, there is always that possibility. That is why we may want to choose someone that we trust, an attorney, or someone that has taken out a bond, to insulate or mitigate against to costs associated with wrongdoings.
According to Probate Code §4100-§4310: This form allows an individual to act in the place of someone else for financial needs only. The principal grants these powers to a trusted friend or relative called an agent. The agent can only act as the principal specifies and the agent has a fiduciary responsibility to act in the best interests of the principal. It should be noted that because it is considered “durable,” the powers granted to the agent continue even if the principal becomes incapacitated. EstateLDA makes creating your legal documents easy, and affordable and the California Financial Power of Attorney is one of those legal documents.
Power of Attorney
A Power of Attorney document allows one person, (an attorney-in-fact) the legal authority to act on behalf of another person (the principal) and make decisions when that person is unable to, be it real estate, business, or finance.
A principal can allow their attorney-in-fact to make any of their decisions (using a General Power of Attorney) or some of their decisions (using a Specific Power of Attorney).
The rules for Power of Attorney may be different from state to state, when you create a Power of Attorney through www.estatelda.com, the document is prepared according to the rules of your state.
General Information About a Power of Attorney
What is a Power of Attorney?
A Power of Attorney, also known as a POA, is a document where one person (the principal) appoints another person (the attorney-in-fact). known as the agent. In some states, it may be known as a mandatary and this person acts on their behalf with respect to matters like finance, real estate, and business.
What is an AIF, “Attorney-in-Fact”?
Depending on your state, when you (the principal) appoint an attorney-in-fact, agent, or mandatary, this person then possesses the power to acts on your behalf, making decisions regarding your affairs.
Who should I choose to be my AIF? It can be anyone of your choosing, like a relative, friend, spouse or an attorney.
What are the requirements to be an AIF?
– Of legal age in that state
– Not having a pending bankruptcy
– There should be no conflict of interest, such as not being the owner, manager or employee of a retirement or nursing facility where you are living
– While there are no specific qualities or licenses required, your AIF should clearly be trustworthy, and able to handle the affairs you designate, diligently
– Knowledge and ability to keep financial records, financial management skills
It also may be acceptable for your AIF to be the same person you appoint to administer your Last Will and Testament or a beneficiary of that same Will. However, if you anticipate trouble after your passing, you may wish to appoint an impartial party as your AIF, someone that does not benefit from your passing.
An AIF, attorney-in-fact can be given the power to make financial decisions in your place, like making payments or closing accounts for you.
For example, if you were diagnosed with an illness that required long-term hospitalization, you may allow your AIF, attorney-in-fact to cancel unneeded bills.
Your AIF can hold other financial powers that you designate, including the ability to control bank accounts, cash checks, or transfer money.
A Power of Attorney lets your AIF, attorney-in-fact handle legal matters for you. This means they may begin lawsuits, communicate with your attorney, file documents with the court, and more, depending on the right you have assigned to them.
For example, if you were in the middle of a business negotiation but needed to be away for business, you may grant your attorney-in-fact the power to handle negotiations and signing your paperwork.
You may restrict your attorney-in-fact’s powers and may want to restrict your attorney-in-fact’s ability to start lawsuits on your behalf.
Common reasons for a person to get a Power of Attorney?
– Traveling for an extended period of time and you have unfinished business, banking transactions, real estate proceedings
– You are getting older and want to be prepared for medical emergencies
– Preparing Estate or similar plans through estatelda.com and want to be prudent
– You have been diagnosed with a medical illness that will require a person to help you in the near future
It is because no one knows what the future will bring that many people try to prepare for these unforeseen circumstances. It is because we cannot create a power of attorney after incapacitation that we may consider using www.estatelda.com to help prepare a state-specific Power of Attorney.
What are the different types of Power of Attorney Documents?
Principal = the person that is giving the power to another
AIF/attorney-in-fact = the person that will act to help the person in need
1. General POA
2. Specific POA
3. Durable POA
4. Springing POA
5. Under the General POA, the principal gives the AIF the right to act and make any of the decisions that you have designated in the document. This is typically a broad reaching document that may allow an AIF to act in a broad/wide reaching manner.
6. Under a Specific POA, the principal should act very specifically according to that document. A great example may be, I am moving, and I need my AIF to sign and pay my closing utility bills. Another may be that I need my AIF to finish signing some real estate documents. However, it should be noted that some states may require an additional document through a title/escrow office before completing certain real estate transactions.
7. Under a Durable POA, aka a Enduring POA, this POA remains in effect from the time it is created and endures even if the principal becomes incapacitated or is generally unable to make his own decisions. This POA may remain in effect until the principal dies or revokes the POA. The document may be more common when the principal is capable but not available to make his own decisions. estatelda.com may help you to prepare your Durable POA, especially if you need to spend time focusing on your health and need assistance with day-to-day affairs.
8. A Springing POA does just that, it springs into actions, either on a specific date or at the inception of a specific event. You may want to prepare for an upcoming major surgical procedure by allowing estatelda.com to help you create your Springing POA. Another reason for asking www.estatelda.com to help you create your Springing POA may be that you want your child to help you with legal matters, in the event that you become incapacitated.