A durable power of attorney for finances is a simple, inexpensive, way to arrange for someone to manage your finances if you becomeunable to make decisions for yourself. If you become unable to make financial decisions for yourself and you haven’t prepared a durable power of attorney, a conservatorship proceeding will be necessary. Your spouse, children, or companion will have need to petition the Court to be able to manage your financial affairs. This document is important in a number of matters. For instance, insurance companies, Medi-Cal, social security and financial institutions will not provide any information to your spouse or children if they do not have a Durable Power of Attorney for Financial Affairs. This can be very crucial if your spouse or children are attempting to obtain health care services for you when you are ill.
A financial power of attorney can be drafted so that it goes into effect as soon as you sign it. If the Power of Attorney is a Durable Powerof Attorney the authority remains in effect even if you become incapacitated. You should specify that you want your power of attorney to be “durable.” If you do not state it is “durable” it will automatically end if you later become incapacitated.
Many individuals execute a power of attorney which does not go into effect unless one or two doctors certify that are unable to manage your own financial affairs. 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.
California has a Statutory Durable Power of Attorney which is a straight forward document which provides your agent with rights to manage your affairs. It is not a complete and full authority to manage all aspects of your financial matters but provides substantial authority to the Agent. For instance, it does not allow the Agent to create or modify an estate plan such as a will or trust, but does allow access to financial accounts and communicate with insurance companies.
A Durable Power of Attorney for Financial Affairs should be part of every individual’s basic estate plan. It is the document which will assist your family in avoiding a Conservatorship proceeding being necessary if you are no able to manage your own financial affairs.