|Powers of Attorney for Asset Management
|What is a Durable General Power of Attorney?
|There are many situations in which an individual may require the assistance of others in
the management of his or her assets or in conducting particular transactions. An
individual cannot act on behalf of another individual without express, often written,
authority to do so. With regard to assets and financial concerns, this written authority
is most often in the form of a power of attorney.
A power of attorney instructs others (e.g. a bank) that one individual, known as the
agent, has the authority to act on behalf of another individual, the principal.
Often situations in which it will be necessary to have express written authority to have
someone act on your behalf are planned and the necessary documents drawn up. For
example, one such situation may be where a couple is selling their residence and one
spouse has to go out of town before the transaction is completed. The couple can
anticipate the need to have a power of attorney drawn up that will allow the spouse
who remains in the area the authority to sign documents on behalf of the spouse who
All too often, however, events happen where an individual needs such assistance, but
did not foresee the particular time or conditions that would cause them to need help.
These situations often involve individuals who become incompetent or ill. Once an
individual is incompetent, he or she cannot sign a power of attorney and the choices
available for those involved in his or her life become very narrow. Often, the courts are
ultimately involved, unless he has made the appropriate provisions in advance.
In California, an individual can prepare in advance for a situation in which he will not be
able to act for himself by executing (signing) a Durable General Power of Attorney.
There are many types of powers of attorney, some address only specific situations and
others are general. This page is devoted to a durable general power of attorney
that allows the individual to appoint another person to make financial decisions on
behalf of the individual and to manage the individual’s assets in the event the individual
becomes incapacitated. A discussion about a similar document called an “Advance
Care Health Directive” that allows a principal to appoint an agent to make health care
decisions is currently under construction and will be featured on another page of our
|There is language used in referring to, and discussing, powers of attorney that may be
specific to this area and unknown to you. Definitions for some terms follow. To
examine a more comprehensive list of terms used in probate please refer to our
|Power of Attorney
A Power of Attorney is a written document in which an individual grants another
individual the authority to act on his or her behalf.
The principal is the person who grants authority to another person to act on the
principal’s behalf. The principal executes (signs/creates) the power of attorney.
The agent/attorney-in-fact is the person who is granted the authority to act on the
A person who is incapacitated is unable to act on his or her own behalf.
A person who is competent meets a certain minimum requirement of soundness of
mind and ability.
Durable Power of Attorney
A durable Power of Attorney is effective even in the event that the principal becomes
|Purposes of a Durable General Power of Attorney
|As stated above, there are many different types of powers of attorney. As in the example above, married couples often
encounter situations where they have the need to use powers of attorney that allow one spouse to act on behalf of the
Essentially, as an adult individual who owns property there are certain actions only you, as the property owner, can
undertake. This applies to real property, a home, or personal property, bank accounts, investments, etc. If you own a
home, only you have the authority to sign the documents necessary to sell the home. If you have bank accounts or
investments, only you have the authority to access information about the accounts and undertake transactions with the
accounts. The concern is what happens should you become incapacitated and unable to act on your own behalf. First
let’s examine what we mean by “incapacitated.”
As stated above, when an individual is incapacitated he or she is unable to act on his or her own behalf. How that
determination is made, and who makes it, depends upon the context. Lack of capacity may result from illness,
accident, aging and other causes. A physician may determine incapacity or a court may, and the criteria differ. A
situation that most people may be familiar with is the incapacity that occurs when someone ages and becomes senile, or
in more severe cases, suffers from Alzheimer’s disease. Senility results in a person’s mental faculties declining. The
person’s memory suffers. The person becomes less able to understand concepts and analyze situations, and thereby is
unable to comprehend the consequences of his or her decisions.
Incapacity may also result from serious injury from an accident . For example, if an individual is in an automobile
accident and suffers injuries severe enough to render the person unconscious, he or she is incapacitated at that time.
The incapacity may be temporary, or it may be permanent. The person may regain capacity when he or she regains
consciousness, or the person may lapse into a coma and be incapacitated for a prolonged period of time. Another
situation is faced when the injuries result in the person being in a persistent vegetative state; at that time the incapacity is
likely to be permanent. These examples illustrate an important point. An individual may be incapacitated at one time,
but may regain capacity at another. This is important to remember.
When an individual faces a situation that renders him or her unable to make decisions on his or her own behalf,
someone else must make decisions for that individual. If the individual has executed a durable general power of
attorney, the individual (principal) has appointed an agent to make decisions, other than health care. Upon the
incapacity of the principal, the agent can act on behalf of the principal. So, in terms of the situations above, the agent
can take care of any circumstances that arise that require the principal to take action. For instance, the agent may
access bank accounts and obtain funds that may be necessary to pay bills for the principal while he or she is in the
hospital. The agent may follow through with transactions the principal was involved in prior to being incapacitated. For
example, if the principal was selling his or her residence and the transactions were almost complete, however, in the
meanwhile the principal was involved in an accident, the agent may complete the transaction for the principal.
|Under Construction, More Coming Soon.....