Estate Planning

What Is a Durable Power of Attorney (DPOA)?

A power of attorney is a written document in which a person (called the principal) appoints someone else (called the agent or attorney-in-fact) to act on his behalf. A “non-durable” power of attorney terminates when the person who created it become legally incapacitated. A “durable” power of attorney, on the other hand, continues to be valid even after the principal becomes incapacitated. If you want to prepare a power of attorney but do not want the attorney-in-fact’s powers to become effective until you become legally incapacitated, you can create a “springing” power of attorney. A springing power of attorney becomes effective only upon the happening of an event that you have designated. No matter what type of power of attorney you create, it will terminate when you die.

Why Do I Need A Durable Power of Attorney?

The older we become the more likely we are to develop a mental disease or disability such as dementia. A person suffering from a disabling condition may one day become unable to understand and appreciate the consequences of his/her actions. If this occurs, our legal system may find them legally incapacitated. A person who lacks legal capacity cannot take certain actions or make decisions for themselves. For example, they may not be able to enter into contracts, transfer property, or consent to medical treatment. This can leave the incapacitated person’s assets frozen and important health-care decisions unmade. A durable power of attorney allows you to appoint someone else to manage your finances and/or make health-care decisions for you when you are incapacitated. It is, therefore, a valuable tool that you can use to prepare for incapacity. Everyone should have a durable power of attorney for financial management and a durable power of attorney for health care decisions. They give you security in knowing that someone you trust will be managing your finances and making health related decisions for you in a way that serves your best interest.

What Happens If I Have Not Given Someone A Durable Power Of Attorney And I Become Incapacitated?

No one can take charge of your assets or make healthcare decisions for you without being a court-appointed conservator, if you become incapacitated and have not given someone a durable power of attorney. A conservator is a guardian for an adult, who will be in charge of most, if not all your financial and healthcare decisions. Someone must file a petition with the court to have your conservator appointed, and give notice of the proceedings to your relatives. If the court after a hearing and reviewing all the relevant facts, including the court investigator's report, determines that your are no longer legally competent, it will appoint conservator over your estate and/or person. The conservator will be subject to the continuing supervision of the court and must file periodic reports and accountings. Certain transactions will require the prior court approval after a hearing. The initial appointment can take months and costs thousands of dollars for legal fees and costs, which will usually be paid from your assets.

Can I Use the Power of Attorneys Sold at Stationery Stores?

If properly signed and notarized or witnessed, a power of attorney sold at a stationery store is valid and will authorize your agent do many things on your behalf. However, it is not advisable to use these forms for Medi-Cal planning because they do not authorize the agent to make gifts. The power to make gifts is often needed in order to plan for a person’s long-term care in a nursing home. Many middle-income families lose their homes and life savings due to the high cost of nursing home care. But many of those families could have preserved their major assets and had their nursing home bills paid for by Medi-Cal, a federally funded health care payment program administered by the State of California. Applying for and planning for Medi-Cal can be complicated. An elder law attorney can help you through the application process and can design a plan for you that will preserve the maximum amount of your assets and income.

The attorneys at the Kisner Law Firm are also elder law attorneys and are trained and experienced in Medi-Cal planning.