POWER OF ATTORNEY
A power of attorney, or POA, is a document in which one person grants another person the ability to act on the grantor’s behalf. The authority in which the agent may act if provided in the document. The POA may be for business or financial reasons, or it may be for medical decisions, it is a common estate planning tool.
General and Durable Power of Attorney
A general and durable power of attorney is used for business transaction. If the POA is identified as durable, it means that it will continue to be in full force and effect if the grantor becomes disabled. The power to act ends upon the death of the grantor or revocation of the power of attorney by the grantor.
For example: if the parent grants a POA to a child and the parent suffers a stroke and con no longer handle their affairs, the child may act for the parent. The child may be able to access the parent ‘s bank account to pay monthly bills, sell the parent’s assets, including real estate, or purchase assets on behalf of the parent. Without a properly executed POA, a conservatorship proceeding may sometimes be necessary to handle the affairs to the disabled. This can be costly and time consuming.
The powers granted may be broad or narrow, depending on the desires of the grantor. In California, a POA is usually used. The document will contain a list of powers to be granted to the agent. These can include real estate, banking, stock or bond transactions, and so forth. For instance, a person may grant an agent eh ability to access the grantor’s financial accounts but not grant the ability to power money on behalf of the grantor.
Because a POA provides access to their finances, great care should be taken in choosing an agent, and thought should be put into the powers to be granted. A consultation with competent legal counsel can help explain the effects of executing a general and durable power of attorney.