Frequently Asked Questions About Powers of Attorney
What is a Power of Attorney for Asset Management?
A Power of Attorney is a written revocable document by which you appoint an attorney-in-fact to act for you. A power of attorney for asset management authorizes an attorney-in-fact to manage your financial affairs. While the attorney-in-fact has a general duty to keep you informed, he or she can typically exercise the powers granted in the power of attorney without your prior knowledge or approval. The authority of an attorney-in-fact will end on your death, or prior to that time if you revoke it. By signing a power of attorney, you are sharing your power, not giving it up.
What is a "general" power of attorney? What is a "limited" power of attorney?
A general power of attorney authorizes your "attorney-in-fact" to handle a broad range of financial matters for you. However, there are certain powers the attorney-in-fact cannot exercise unless the power of attorney explicitly authorizes it, including creating, amending or revoking a trust, making gifts on behalf of the principal, and changing beneficiaries. A power of attorney can never be used to make a will for the principal or to revoke a will signed previously.
A limited power of attorney authorizes your attorney-in-fact to take certain limited actions on your behalf. Such powers are often used for the purchase or sale of a specific property.
What is a durable power of attorney? What is a springing power of attorney?
Historically, powers of attorney became ineffective when the principal, the signer of the power of attorney, became incapacitated. A durable power of attorney remains effective even when the principal loses capacity. That, of course, is the time when the power of attorney is most often needed.
A springing power of attorney allows the attorney-in-fact to act only upon the occurrence of a certain event. Most springing powers of attorney authorize the attorney-in-fact to act if a doctor certifies that the principal is incapacitated, that is, the principal has become unable to manage his or her affairs.
Why do I need a power of attorney for asset management if I have a trust?
The reason is that you probably own assets which are not in the trust. Such assets often include retirement accounts, automobiles, life insurance policies, time shares and small lots. A general power of attorney will allow your attorney-in-fact to manage such assets for you.
What is an Advance Health Care Directive? Why do I need one if my family already knows my wishes?
An Advance Health Care Directive (AHCD), previously known as a Durable Power of Attorney For Health Care, is a written document by which you first, appoint one or more attorney(s)-in-fact to make health care decisions for you, and second, by which you state your instructions and wishes concerning health care as well as the disposition of your remains on death. Many clients do not wish heroic efforts be used to keep them alive if there is no hope of recovery; this is the primary document for stating that wish. Previously, such wishes were incorporated in a document called a Living Will.
Remember, if you do not put your wishes in writing, your wishes may not be carried out.
We can prepare our version of an AHCD for you when you complete and return our questionnaire. Alternatively, you can use the form prepared by the California Medical Association (http://www.cmanet.org/) which is shorter and simpler than our form. Kaiser uses an enhanced version of the CMA form which it makes available to its members.