Having a durable power of attorney in place saves loved ones the time, expense and public nature of petitioning the court.  If one becomes unable to make informed decisions (“incapacitated”) without a power of attorney loved ones must petition the court to appoint a conservator of estate to make financial decisions on the individual’s behalf or conservator of the person to make medical decisions on the individual’s behalf.  This petition process may require result in substantial costs such as attorney’s fees, filing fees, and investigator’s fees.

How a Power of Attorney Works

A power of attorney is an authorization for another person (call an “agent”) to make personal and financial decisions on the principal’s behalf.  A durable power of attorney can be general, covering all aspects of your personal and financial affairs, or may be limited to specific situations.  In Estate planning, there are typically two types of powers of attorney

• power of attorney for finances

• power of attorney for healthcare

A durable power of attorney for finances for allows an individual to designate an agent to make property and financial transactions on the principal’s behalf in the event the principal becomes unable to make informed decisions.  A power of attorney for finances can be effective immediately, or “springing,” meaning that it take effect at some future time, usually when the individual becomes incapacitated.

A health care power of attorney allows a principal to designate an agent to make health care decisions on the principal’s behalf in the event the principal becomes incapacitated. In California, a power of attorney for healthcare is generally combined with a healthcare directive into one document.  A health care directive allows the principal to provide the agent, and healthcare providers with written instructions regarding the kind of treatments that should or should not be given.

With a durable power of attorney for healthcare in place, the individual will continue to make his own medical decisions as long as he is capable of doing so and can communicate those decisions (known as being “competent”). The agent’s authority starts only when a licensed physician certifies in writing that the individual no longer has the capacity to make those decisions. Further, a power of attorney can be changed or revoked at any time and does not give the agent authority to override the decision-making of the principal.