A Power of Attorney, or POA,6 is a very common estate planning tool which can be customized to fit your specific needs. Part of that customization is the ability to execute either a general power of attorney or a specific power of attorney, depending on your intended purpose. Since every person and every family will have distinct needs that should be addressed in estate planning, understanding the benefits of different types of powers of attorney will help to ensure that you create your own plan that fits your specific needs.
What is a power of attorney in Los Angeles?
The California Probate Code defines a power of attorney as follows:
“Power of attorney” means a written instrument, however denominated, that is executed by a natural person having the capacity to contract and that grants authority to an attorney-in-fact. A power of attorney may be durable or nondurable.
Powers of attorney are most commonly executed for the purpose of handling legal, financial or medical needs. For example, a power of attorney can be used to manage bank accounts and pay bills. The key difference between a specific and a general power of attorney is the scope of authority the attorney-in-fact is given over the principal’s affairs.
What is the difference between a special and a general power of attorney?
As the name suggests, a general power of attorney gives the attorney-in-fact broad, rather than specific authority. Creating a general power of attorney is preferable in the event something happens in the future that makes it difficult for you take care of your overall affairs. Having a power of attorney already drafted will allow your attorney-in-fact to take over immediately so your business and other affairs can continue without a hitch.
In the alternative, a limited power of attorney will only authorize the attorney-in-fact to make specific choices on behalf of the principal (the person executing the instrument). For instance, if you own a business, you may execute a power of attorney that authorizes your business partner to take care of specific aspects of the business you would normally be in charge of handling. Another example would be to give your spouse or another relative the ability to make medical decisions for you, in the event you become incapacitated. So, a limited power of attorney essentially authorizes the attorney-in-fact to only carry out a particular task or transaction.
Requirements for creating a power of attorney in Los Angeles
The requirements for creating a power of attorney, whether general or limited, differ from state to state. In California, a power of attorney must be dated and either acknowledged before a notary public or signed by two witnesses. If it is signed by witnesses, they must witness either (1) the signing of the power of attorney itself or (2) the principal’s signing or acknowledgment of his or her signature. Although do-it-yourself power of attorney forms are readily available online, it is much wiser to have an attorney draft this important legal document specifically for you.
Latest posts by Scott Schomer, Estate Planning Attorney (see all)
- Many Reasons to Plan - July 8, 2019
- Use Resources Efficiently With a Special Needs Trust - July 7, 2019
- Business Structures That Provide Asset Protection - July 6, 2019