The 4 Types of Powers of Attorney in California

Individuals who want to preserve their assets for their relatives after their passing can set up trusts or wills as part of their estate plan. However, not all aspects of estate planning deal with what happens after death. If someone wants greater control over their assets and affairs during their lifetime, appointing an agent to act on their behalf can be beneficial. This legal arrangement is a “power of attorney.”

In California, there are four different categories of powers of attorney. Each is designed to cater to specific needs and situations, and understanding their differences can help you make informed and effective decisions regarding your estate plan and healthcare preferences. 

This page provides an overview of California’s four main types of powers of attorney, discusses who needs a power of attorney, and explores which rights are granted via a power of attorney. 

If you want personalized advice and information about creating a power of attorney in California, contact TrustHandled directly today. 

 

What is a Power of Attorney?

A power of attorney (POA) is a legal document that grants someone the authority to act on your behalf in various matters. The person designating the power of attorney, or “principal,” appoints another person, also referred to as the “agent,” to make decisions and carry out certain tasks relating to the matters outlined in the POA document. While wills and trusts primarily address what happens after someone’s passing, powers of attorney focus on managing one’s affairs while he or she is still alive.

A power of attorney enables you to delegate the management of personal and financial affairs to your agent should you become unable to do so yourself. Using such a legal arrangement ensures that a designated individual can step in and handle your responsibilities if you experience incapacitation, illness, or any other circumstances that prevent you from making decisions independently. POAs can also help ensure your affairs are managed according to your wishes during temporary unavailability.

The powers granted can be tailored to meet the principal’s needs and preferences. While the extent of the powers may vary depending on the type of POA and individual circumstances, some of the common powers that can be included in a POA are listed below:

  • Financial transactions
  • Paying bills
  • Managing investments
  • Dealing with legal matters
  • Making business decisions
  • Managing your employees
  • Managing properties or other assets
  • Insurance matters
  • Tax matters
  • Healthcare decisions (Medical POA only)

 

What Are the Different Types of Powers of Attorney in California?

With a POA, you can establish a legal framework that allows a trusted individual to act on your behalf in times of need, protecting your interests and ensuring the smooth management of personal and financial matters. It is a proactive measure that can bring peace of mind and greater freedom to focus only on matters that require your firsthand attention. However, if you feel a POA could benefit you, always understand the different types and their uses. Ultimately, the type of POA that best suits your situation will come down to your needs and preferences. Below are the four types of powers of attorney in California:

  1. General Power of Attorney: This POA gives the agent broad powers to act on behalf of the principal in various financial and legal matters. It allows the agent to make property transactions, banking, tax matters, and more decisions. General powers of attorney are effective immediately upon signing, unless stated otherwise, and terminate upon the principal’s incapacity or revocation.
  2. Durable Power of Attorney: A durable POA is similar to a general POA but remains in effect even if the principal becomes incapacitated. It ensures continuity in decision-making when the principal cannot make choices independently. 
  3. Limited Power of Attorney: This POA grants the agent authority over specific, predefined matters. For example, a principal may grant an agent the power to handle a real estate transaction or sign documents. Once the specified task is completed or the timeframe expires, the authority granted under the POA ends.
  4. Medical Power of Attorney: A medical POA, also known as an advance healthcare directive, designates an agent to make healthcare decisions if you become incapacitated. Powers that can be granted in a medical POA include making decisions related to medical treatments, resuscitation efforts, end-of-life care, and organ donation.

 

Who Needs a Power of Attorney?

While powers of attorney are essential for older adults, individuals with chronic illnesses, and those who anticipate being unavailable in the future, POAs benefit people of all ages and circumstances. If you have properties, bank accounts, or other important assets, it is prudent to incorporate a POA into your estate plan. These helpful documents are relatively easy to create. 

They can ensure that your financial, legal, and healthcare matters are handled according to your preferences, even if you become incapacitated or unavailable. Remember that no one – not even your spouse or children – has the legal authority to sign contracts or manage your financial or legal affairs without a power of attorney.

 

What Rights Do and Do Not Go Along With Giving Someone a POA?

Some certain rights and limitations come with powers of attorney. It’s important to note that granting someone a POA does not revoke the principal’s rights. As the principal, you retain the authority to make decisions independently as long as you can do so. Furthermore, your agent has a fiduciary duty to act in your best interests and follow your wishes. This is why outlining specific powers and restrictions within the POA document is crucial to prevent any potential misunderstandings. Ultimately, POAs exist for the convenience of the principal. This means that you, as the principal, will have the final say in all your personal, legal, and financial matters, even if this means overriding decisions made by your agent.

 

Easily Create Your Power of Attorney Today Using TrustHandled

Are you thinking about creating a power of attorney in California? Obtaining and executing a POA can seem confusing and complicated, especially if you plan to go through a lawyer. However, wasting time at in-office consultations and shelling out cash for an expensive attorney is entirely unnecessary. Instead, use TrustHandled. Our trusted online platform simplifies creating a power of attorney in California, providing you with all of the necessary guides, documents, and templates to complete your estate plan efficiently and affordably. Sign up with TrustHandled today to get started.