California power of attorney requirements

A power of attorney (POA) is a legal document that gives someone you name the authority to handle medical, legal, or financial matters for you under specific circumstances. The person who creates a POA is called the principal, and the person who's authorized to act for you is called your attorney-in-fact or agent.

States set their own rules governing POA arrangements. California power of attorney requirements—and the powers assigned to agents—are defined in the state's code.

Understanding power of attorney

Power of attorney gives someone of your choosing the authority to act on your behalf. Having power of attorney can be helpful if you find yourself in a situation where you're unable to make decisions on your behalf or would prefer to have someone else act for you. If you are suddenly incapacitated in a car accident, for instance, then your attorney-in-fact can step in to handle your affairs.

Depending on how you've worded your power of attorney document, an agent's authority may allow them to do any of the following on your behalf:

• Speak with financial institutions and access your bank accounts.
• Conduct real estate transactions in your name.
• Discuss business matters with your partners or business co-owners.
• Make healthcare decisions, including which types of medical treatment should be administered or withheld.
• Sign contracts for financial or business transactions.

You may choose one person to act as your agent in all of these situations or have more than one agent if state law allows it. California power of attorney rules allow you to name multiple agents or attorneys-in-fact, which you may prefer if you'd like to have different people oversee financial decisions, medical decisions, or business affairs for you.

Who needs a power of attorney in California?

California power of attorney laws offer protection in a variety of situations. Generally speaking, if you own a home or business, then it may be a good idea to have this type of legal document in place.

In terms of specific scenarios where a California power of attorney can be useful, here are a few examples.

• You get involved in a serious car accident that leaves you in a coma for two months. It's left to your agent to manage your health care with your doctors until you regain consciousness.
• Your parents are getting older and you're worried about them becoming targets of elder abuse, including financial scams. You suggest that they give you an agent's authority to handle their financial affairs should their mental capacity begin to decline.
• You own a successful business and enter into an agreement to acquire another, smaller business. You're unable to be present the day the deal closes so you authorize your power of attorney to sign the contract for you.

In any of these situations, power of attorney lets you (or whoever the principal is) maintain a measure of control even when it's not possible to act directly.

Types of powers of attorney in California

There's more than one option for establishing power of attorney in California. The one you choose can depend on your needs and situation. Here's a closer look at the different possibilities for California power of attorney.

General power of attorney

A general power of attorney in California is the most comprehensive option since your agent's authority can extend to both financial and business affairs. General power of attorney is also flexible, as you can rescind it at any time or name a new attorney-in-fact.

Limited power of attorney

When a general power of attorney document can grant broad powers to an agent, a limited power of attorney only authorizes them to act in specific situations. For example, if you and your spouse are buying a home together and your spouse is deployed in another country and can't make it to the closing, you might be granted limited power of attorney to sign the contract in their place. Once the signing is done, your authority as an agent ends.

Healthcare or medical power of attorney

A medical POA gives your agent the authority to make health care decisions for you. This document, also called an advance health care directive, limits your agent to making health decisions only when you're incapacitated unless you specify otherwise. You might set up a medical POA if you're worried about being involved in an accident, you have to undergo surgery, or if you're diagnosed with a terminal illness.

What is a durable power of attorney?

In addition to defining different types of power of attorney, California law allows principals to decide when a POA takes effect. Power of attorney authorization can be durable, non-durable, or springing.

Here's a simple durable power of attorney definition. It means that the POA takes effect as soon as the principal signs it. You might consider setting up a durable POA to allow your agent to manage healthcare decisions, financial affairs, or business matters if you're worried about not being able to do so yourself.

A non-durable POA, on the other hand, only conveys limited power to the person acting as your agent. Once you become incapacitated, an agent's authority to make financial decisions or business decisions for you ends. That could leave your loved ones in the position of having to obtain a guardianship or conservatorship if you're unable to make your own decisions.

Springing durable power of attorney, on the other hand, grants your agent authority to act only when you become incapacitated. Understanding the different ways to structure power of attorney can help you decide whether it makes sense to choose a durable, non-durable, or springing POA option.

California power of attorney requirements

California power of attorney requirements are fairly straightforward. Here are all the boxes you'll need to check off to create a valid California power of attorney.

• If you're the principal, you must be at least 18 years old.
• You must have the mental capacity to establish a POA, meaning you grasp what it is and the implications of setting one up.
• The person you choose as your agent must also be 18 or older and have mental capacity.
• Your power of attorney document must be signed in front of a notary public or by two competent witnesses.

There's an additional requirement if you're setting up a power of attorney for real estate transactions. In that case, you'll also have to get your POA notarized, and the agent cannot be a witness.

A medical POA that's signed in a nursing home must be witnessed by a patient advocate or ombudsman. That's in addition to the two competent witnesses and the notary public that are also required.

Power of attorney in real estate transactions

Real estate transactions can be some of the most complicated financial affairs to manage since there are often many legal hurdles to jump through. In California, your power of attorney can act for you to do the following:

• Buy or sell property or land
• Collect rent from investment properties you own
• Hire contractors or subcontractors to repair or maintain primary homes or investment properties
• Communicate with your mortgage lender, including sending payments
• Obtain information about your property from the land records office
• Represent you in matters related to property tax hearings or filings

Having power of attorney for real estate transactions can be helpful in situations where you can't be present to sign documents or authorize payments. As mentioned, it may also be helpful for older people to have someone to act as a financial POA on their behalf to protect their property or other assets against elder abuse.

Attorney in fact vs. agent

Under California POA rules, an attorney-in-fact and an agent are essentially the same things. They're two different terms used to describe a power of attorney. When naming an attorney-in-fact or agent, it's important to choose someone that you can rely on to carry out your wishes and act in your best interests.

For example, if you want to set up an advance health care directive that includes a do-not-resuscitate order, you may want to make that clear to the person you plan to name as your medical POA beforehand. Specifically, they need to understand that they cannot override your wishes if they disagree with them.

Likewise, if someone else chooses to name you as their agent under California power of attorney rules, you need to know what you are and are not authorized to do. Before you agree to become someone's power of attorney, it's a good idea to have a discussion with them about what they expect and when you might be called on to act for them.

How to create a power of attorney in California

In California, you must use a specific power of attorney form as dictated by the state code. You can find financial POAs in California Probate Code Section 4401, called a Uniform Statutory Form Power of Attorney. This is used to create general or limited POAs. The California healthcare POA is found in Section 4701 of the Probate Code and is called an advanced healthcare directive.

You can also work with an attorney or an online service to create and execute your POA. If you're unsure about which form to use, getting legal help is a good idea.