Power of Attorney basics

On Behalf of Griswold LaSalle Cobb Dowd & Gin LLP

A power of attorney is an essential component of every California resident’s estate planning repertoire. A principal appoints an agent or a number of agents to act on the principal’s behalf. POAs can be general, allowing the agent to make any decision or limited, in that the agent’s powers are restricted.

Why is a POA important?

A POA allows the agents to make decisions for the principal in case the principal becomes incapacitated. These decisions could be financial, medical or of any kind needed at the time. Someone without a POA risks having the court appoint a guardian who will most likely not know the principal. The idea is that appointing a trusted person as an agent will ensure that decisions are made for the principal’s best interests and the principal would have briefed the agent of their wishes.

Do all financial institutions accept POAs?

Unfortunately, not all institutions are required to accept POAs. They may each have their own standards. Some might have a time requirement, while others may want them on their own forms. Other financial institutions may require specific language in their POAs. Additionally, the agent will have to prove their identity and their authority. An agent can avoid this problem by going to their financial institutions and determining what their requirements are for an acceptable POA.

The main goal of having a POA is to make sure someone responsible and trustworthy is appointed to pay bills and ensure financial decisions are being made in the principal’s best interests if the principal is unable to. however, if a financial institution does not accept the POA, it is useless. This is why consulting an experienced attorney can be helpful in creating a durable and legal power of attorney.

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