You can take control of your financial and medical future by establishing a power of attorney. This legal document allows someone else to make important decisions on your behalf when you are unable to do so.
Knowing how a power of attorney works in California can help you understand why it is an important part of your estate plan.
Terms to understand
When you set up a power of attorney, the document will name you as the principal. The person you authorize to act on your behalf is the agent.
The agent can make decisions such as handling finances, managing property or making healthcare choices. You can establish the course of action you want them to follow when you cannot speak for yourself. The person does not have power over all your affairs; they only control the areas detailed in the legal power of attorney.
Types of documents
California offers several types of power of attorney documents depending on your needs. A general power of attorney provides broad powers to the agent, allowing them to manage financial and legal matters. A healthcare power of attorney, also known as an advance healthcare directive, lets the agent make medical decisions for you when you cannot. Either can be a durable power of attorney, which remains effective if you become medically incapacitated.
How to establish one
To create this legal document, you must put your wishes in writing and sign them in the presence of a witness. You should notarize the document to ensure healthcare providers and financial institutions will accept it as valid. California does not recognize a power of attorney created when a person is no longer mentally competent.
About two-thirds of Americans do not have an estate plan, but establishing the necessary legal documents can provide peace of mind. Once you have a power of attorney in place, review it regularly to make sure it still reflects your wishes and life circumstances.