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In the legal industry, there is a written document that authorizes someone to act on another’s behalf in private affairs, business, or some other matters that require legal representation. It is called Power of Attorney (POA). The person authorizing the other to act is known as principal or grantor. The one authorized to act is called the agent or attorney-in-fact.

 

The person who creates a power of attorney, known as the grantor, can only do so when he or she has the requisite mental capacity. That means, if someone is already not in his sound mind, it is not possible for that person to execute a valid power. If a person does not have the capacity to execute a power of attorney (and does not already have a durable power of attorney in place), often the only way for another party to act on their behalf is through a court that imposes a conservatorship or a guardianship.

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Types of Powers of Attorney

 

Durable Power of Attorney

A Durable Power of Attorney (DPA) is a legal document that lets you (the principal) give authority to another individual (your agent or attorney-in-fact) to make financial and/or legal decisions as well as financial transactions on your behalf. It is called “durable” for a reason – because it remains effective even if the principal is no longer mentally competent.

 

Now, the next question: Who can serve as an agent or an attorney-in-fact? Any trusted adult, such as a spouse, relative or friend, can serve as attorney-in-fact. It is always a good idea to have at least one alternate attorney-in-fact ready to serve should your first choice becomes disabled or dies. Having said that, it is important to note also that your attorney-in-fact will have broad authority, and it is crucial that the person you select is trustworthy and sensitive to carry out your wishes.

 

The powers you give your attorney-in-fact can be as limited or as broad as you like, and can include the power to manage your property, to buy property, to invest, to contract, to engage in tax planning, to make gifts, and, very importantly, to plan for government benefits, such as Supplemental Security Income and Medi-Cal.

 

Health Care Power of Attorney

The Health Care Power of Attorney gives the attorney-in-fact the authority to make health-care decisions for you (the grantor), up to and including terminating care and life support. The grantor can typically modify or restrict the powers of the agent to make end-of-life decisions.

 

Your agent also has the right to examine your medical records and to consent to their disclosure unless you limit this right in your power of attorney.

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Are Powers of Attorney Permanent?

 

The power you give your agent or attorney-in-fact will continue to take effect for your lifetime, unless you have indicated a specific period or you terminate the power of attorney in a shorter time. Again, the powers you give your agent in the power of attorney will continue to take effect even if you can no longer make your own decisions.

 

You can amend or change a power of attorney only by executing a new power of attorney or by executing an amendment through the same formalities as an original.

 

You have the right to revoke or terminate a power of attorney at any time, so long as you are competent.

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