general

THE GENERAL DURABLE POWER OF ATTORNEY

The General Durable Power of Attorney (GDPA) is a powerful planning device for most people. It can be particularly useful for individuals who are concerned about future planning for physical or mental incapacity. It can also be the most harmful without careful thought and preparation.

The following information is meant to be a general, not an exhaustive, overview of this estate planning device. However, it is important for each individual to know that a GDPA is a very powerful tool, which has the capacity for misuse. Thus, the document should not be entered into casually, but with proper legal advice and careful planning.

What is a Power of Attorney

A Power of Attorney is a document wherein one person, the principal, gives authority to another person, the Agent or Attorney In Fact, the power to act on behalf of the first person. The authority may be limited to a particular task or type of property or for a limited period of time. It can also be General, which confers broad authority to act on your behalf.

What Does "Durable" Mean?

Generally, any Power of Attorney is valid only if the person who signs the document has capacity during the time the Agent seeks to use the document.

Adding the word "Durable" to a Power of Attorney means that the documents will continue to be valid even if the person giving the power becomes incapacitated.

Types of Durable Powers of Attorney

Effective immediately: This type is effective upon signing and remains effective even after the person becomes incapacitated.
Effective upon incapacity: A "Springing" Power of Attorney, becomes effective only if the person loses capacity.

What Authority Can Be Granted in a GDPA

The power to manage all or certain assets can be granted if the document contains proper and precise language. This includes the power to invest and sell assets, to enter into contracts, to collect and recover assets, to make gifts, deal with insurance, to operate or sell a business, to handle tax issues and even to respond to trust issues.

Does the GDPA Include Health Care Decisions?

No. Consistent with California law, a Health Care Power of Attorney is a special document which should be separately prepared.

Benefits of a GDPA

Often, a GDPA can avoid the intrusive procedure of a conservatorship of the estate. A conservatorship involves a court hearing in which an individual, the "conservatee", is found to be unable to handle his own affairs, and another person, the "conservator", is appointed. A conservatorship is often expensive, always intrusive and requires on-going court supervision required.
However, an individual may nominate the person of choice to be his or her conservator. The courts have final word on who is actually appointed. This choice or nomination of conservator should be included in the Power of Attorney. (See Conservatorship Information elsewhere on this site.)

Control

Another benefit of the GDPA is that the individual retains greater control over his or her affairs. This can be comforting where illness is present and the individual is concerned about the loss of capacity.

"FORM" Powers of Attorney

California law provides for Statutory Power of Attorneys. This document may be a helpful in certain circumstances as California law provides a means to enforce the provisions. However. mere form documents are rarely adequate to accomplish specific wishes. Form documents should only be executed if an individual has received advice about potential shortcomings and the consequences. For instance:

1. 1.A GDPA grants enormous authority over the assets and transactions. Because of such complete authority it is frequently necessary to go beyond the forms and build-in protections necessary for each situation. For example: rather than including a power to make gifts, you may wish the power to make gifts to be limited to birthday gifts rather than giving away your home.
2. 2.Alone, these documents may be wholly inadequate for many people. This may be due to family problems, complex or extraordinary personal assets, or other reasons. In some cases, a Living Trust may be an partner to the GDPA.
3. 3.Some forms require the individual to choose from a list of options which may not appear to be needed currently. When not selected, the need for the option may arise in the future. Or, the form documents do not contain adequate explanations or possible results from the selection or omission.

Summary

The General Durable Power of Attorney, if properly drafted, may be one of the least expensive forms of insurance a person can buy. Of greater concern should be how your affairs are handled while you are alive and unable to act, rather than how your estate may be distributed after you have gone.

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