POWERS OF ATTORNEY FOR FINANCIAL AFFAIRS

Most people are aware of the fact that they should have a will and/or an estate plan so that upon death their estates can be administered and distributed to their beneficiaries promptly and efficiently.  However, many people fail to plan adequately for lifetime disability.  You should be concerned about the possibility of your disability, that is, your inability to legally handle your affairs (business, financial and personal).  Disability can arise from a number of different causes, for example, illness (such as a stroke), injury, an accident, old age or the inability to locate or contact you.  If you are unable to handle your affairs, who can and will do so?

In such cases, California law provides for a probate court proceeding to have an individual or an entity appointed to act on your behalf. Guardianship and conservatorship proceedings involve time, expense and perhaps even the embarrassment of trying to prove that you are mentally incompetent.  Furthermore, you have no assurance as to whom the court will appoint.

There are two kinds of powers of attorney for financial affairs: the Uniform Statutory Form Power of Attorney and the Durable Power of Attorney.

Uniform Statutory Power of Attorney

This document gives a relative, friend or an entity the power to act on your behalf, effective immediately.  You have the choice of designating specific kinds of powers granted to your agent, or you can grant all powers.  A Uniform Statutory Power of Attorney may be terminated upon your incapacity or can continue even if you become incapacitated.

Durable Power of Attorney

A Durable Power of Attorney is similar to the Uniform Statutory Power of Attorney, except that it only becomes effective upon your incapacity.  This document is generally more extensive detailing the specific powers granted, the allowable expenses and reimbursements, how incapacity is defined, etc. In order to be valid it must be signed by you before you become incapacitated.  You should consider having a Durable Power of Attorney. It can save you and your family time, expense and the inconvenience of a probate court proceeding.

Everyone should consider the advantages of having a Durable Power of Attorney.  It is an important part of estate planning.