A power of attorney is something that many Californians will consider as they are moving forward with estate planning. While other documents like a will or a trust might come to the forefront, certain issues can arise that make it beneficial to have a power of attorney. Still, people may not realize exactly what this entails and the amount of responsibility that the agent is given once the power of attorney is signed. Knowing the key facts and exactly what authorizations are granted to the agent is imperative as it can have a direct impact on who is selected.
Crucial aspects of a power of attorney that should be understood
The agent is known as the attorney-in-fact. The document must be agreed upon in writing for it to be valid and for the agent to act on behalf of the principal. The agent will have various rights including the ability to sell, dispose of and transport the personal property belonging to the principal. That property can be used as security to borrow money on the principal’s behalf. However, the agent cannot take a principal’s property as a gift unless specific authorization is given.
People might not realize that agents have the right to be compensated for the services they perform under a durable power of attorney, but they do. The agent will have these powers for the principal’s lifetime except in cases where the durable power of attorney specifically says it will last for a shorter amount of time or it is terminated. The terms will stay in place if the principal cannot make his or her own decisions. The durable power of attorney can be changed by executing a new one or amending the original. It can be terminated whenever the principal decides to do so when he or she is still competent.
A power of attorney is useful, but the details should be known
People believe they are protecting themselves and their interests if they have a power of attorney as part of their estate plan. In general, it is an excellent idea if they are fully cognizant of what it entails. A fundamental aspect of the power of attorney is naming a trustworthy person to be the agent. Knowing the extent of the powers granted to the agent and how it can be revoked or modified are all keys. For assistance with this or any other estate planning issue, having experienced advice can make the process easier in times of crisis and when preparing for the unexpected.