Considering a California Durable Power of Attorney as Part of Your Estate Plan? Read This First

California durable power of attorney as an estate planning tool

A California durable power of attorney can be an important part of your estate plan. It allows someone to act on your behalf regarding legal and financial matters if you ever become incapacitated. Because a California durable power of attorney is a legally binding document, it’s important to consider several key points.

Related: California Estate Planning: The Basic Documents Involved

Who You Plan to Appoint to Act on Your Behalf

The first consideration for California durable power of attorney is deciding who you want to authorize to make decisions on your behalf. This person needs to be trustworthy as well as someone you know will act in your best interests. They need to be financially responsible and able to handle stress. You are under no obligation to name someone to whom you are related. You can name a friend, a lawyer, or anyone else that you know who is willing to perform when you need them.

Also, you should consider how many people you want to appoint. Many parents name all of their children. The problem here is that it can create confusion. Some institutions may not want to honor the document unless every person named agrees to a course of action. It really is best to name one person and then a back up person who may take on the role if the first person cannot or will not fulfill the role.

Whether the Document Shall Be Considered Springing or Current

If you do not want your California durable power of attorney to immediately take effect, you’ll want to define the incident that must occur for the document to become active. This is known as “springing.” The drawback to a springing durable power of attorney lies in the fact that the named agent will likely need to present some sort of evidence that the document is in effect. For example, a notarized letter from your attending doctor that states you’re incompetent. A current durable power of attorney can be used at any time. If you leave the country, your appointed representative can make decisions for you while you’re gone.

Decide Whether Your Agent Can Gift Your Assets to Others

Gifting is an important estate planning strategy for many. However, you should decide whether that’s a power you really want your agent to have. Your durable power of attorney should specifically address whether gifting may be done by the agent.

Decide Whether Your Agent May Create, Change, or Access Trusts

Most California durable power of attorney documents allow the agent to continue funding for an existing trust, but they may not be able to create or change trusts. This is another important issue you should consider before drafting the document.

Those are just the basic things you should think about in relation to your California durable power of attorney. Talk with your estate planning lawyer to determine if there are other concerns you should address.

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