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Message #668 Durable Power of Attorney for asset management

mp3 #668 Durable Power of Attorney for Asset Management (mp3 file)


You may want to appoint someone that you trust, to make legally binding personal business decisions for you in managing your assets, in case you later become mentally or physically disabled, or for other reasons such as going on a long trip. The document you use to do this is called a "power of attorney", and the person you appoint as your agent is called your "attorney in fact". An "attorney in fact" is not the same as a lawyer, however. A general power of attorney permits your agent to make many different business decisions on your behalf. A special power of attorney permits your agent to make only certain limited decisions on your behalf.

California law makes it possible for you to use a statutory form power of attorney. This document may be available for you to purchase at a stationary store. If you cannot find a form to purchase, you may copy the wording found in California Probate Code Sections 4100 - 4128. You will find the probate code in your local law library, or your local public library may obtain a copy for you. You may establish a power of attorney by using this form, and by filling in the blanks yourself, without the assistance of a lawyer.

The statutory power of attorney form which may still be used even though the applicable code sections have been renumbered, begins with this warning to you:

Notice: the powers granted by this document are broad and sweeping. They are explained in the uniform statutory form power of attorney act (California Civil Code Sections 2475 - 2499.5, inclusive). If you have any questions about these powers, obtain competent legal advice. This document does not authorize anyone to make medical and other health-care decisions for you. You may revoke this power of attorney if you later wish to do so.

It continues as follows:

I ____________ appoint __________ as my agent (attorney-in-fact) to act for me in any lawful way with respect to the following initialed subjects:

To grant all of the following powers, initial the line in front of (n) and ignore the lines in front of the other powers.

To grant one or more, but fewer than all of the following powers, initial the line in front of each power you are granting.

To withhold a power, do not initial the line in front of it. You may, but need not, cross out each power withheld.

It may be in your best interest to consult a California lawyer because the powers granted in this document are broad and sweeping. They are defined in sections 2485 - 2499, inclusive, of the California Civil Code.

The powers granted by this document will exist for an indefinite period of time unless you limit their duration in this document. It also ends upon your death. These powers will continue to exist notwithstanding your subsequent disability or incapacity unless you indicate otherwise in this document.

You must specifically designate the powers of your agent by initialing each of the powers listed in paragraphs A - N of this form. You can write other limitations and special provisions in the "special instructions" paragraph of this form. However, if you do not want to grant your agent the power to act for you in any way you could act for yourself, it may be in your best interest to consult with a lawyer instead of using this form.

This document must be signed by the principal and acknowledged before a notary public or signed by at least two witnesses to be valid. A notary public is usually available at your legal banking institution.

You have the right to revoke or terminate this power of attorney.

You are not required to use this form; you may use a different power of attorney if that is desired by the parties concerned.

If there is anything about this form that you do not understand, you should ask a lawyer to explain it to you.

In the form itself, you state the name and address of the person or persons you designate as your agent, to ask for you, and in your name, in any way that you could act if you were personally present and able to act.

You may then choose which powers to grant to your agent and if necessary, insert any special provisions and limitations on the powers of your agent. If you want the power of attorney to end automatically if you become incapacitated, you may state that as a special provision.

Remember to sign your power of attorney form before a notary public for the county where you execute the document. If you later change your mind, you may revoke your general or special power of attorney at any time. The revocation should be in writing, notarized and recorded. You should communicate the revocation to your agent and provide the agent with a copy of the revocation document.

There are some dangers in using the statutory form for a durable power of attorney for asset management. If you nominate as your agent a person who turns out to be dishonest, your agent could do such things as change the beneficiaries of your life insurance policies and retirement benefits, give away your assets, remove funds from your bank accounts, and gain access to your safe deposit boxes. Such acts could be done by your agent without your knowledge, because the statutory durable power of attorney form for asset management becomes effective immediately, while you are still competent to manage your own affairs.

One way to avoid such dangers is to delay the effective date of the durable power of attorney for asset management. Instead of becoming effective immediately, you can have the power of attorney become effective only if and when you become mentally or physically incapacitated. This is called a springing power; it springs the power of attorney into effect only when you become mentally or physically incapacitated. In the meantime, you keep exclusive power over your business affairs in your own hands. You may want to include a provision that the durable power of attorney is sprung only by the issuance of a certificate by one or more physicians stating that you are no longer capable of managing your own affairs.

You may also avoid some of these dangers by taking these additional precautions:

1. Select your agent carefully and limit your agent's power;

2. Appoint more than one agent and require that they act together instead of individually;

3. Give the original document or the durable power of attorney for asset management to your attorney and require your appointed agents to prove a need for the original document before they can obtain it; and

4. Designate another person who can remove your agent for good cause or designate another person to act as a conservator of your assets so that court control is available over the actions of your agent under the durable power of attorney.

These safeguards are not built into the statutory form for a durable power of attorney for asset management. You may wish to consult with your lawyer if you wish to include these safeguards into your durable power of attorney for asset management.

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