California Durable Power of Attorney Laws

Creating an estate plan is about more than just providing instructions about distributing your property at your death. A comprehensive estate plan also includes instructions about how to manage your finances and your healthcare if you become incapacitated.

A power of attorney (POA) is a legal document. The person creating the POA (the principal) grants another person (the attorney-in-fact or agent) legal authority to act on the principal’s behalf, within the scope defined in the document. There are several different types of power of attorney.

For estate planning purposes, POAs are a way to manage your financial matters (durable power of attorney for financial matters) or your healthcare decisions (power of attorney for healthcare) if you become incapacitated. To be effective for this purpose, these POAs must be durable powers of attorney. They should remain effective during the principal’s incapacity if they cannot or should not make their own decisions. With these legal documents in place, you can protect your family members and loved ones by ensuring your financial and healthcare matters are in trusted hands during your incapacity.

Key Difference Between a POA and a Durable POA

It’s important to distinguish between a non-durable power of attorney and a durable power of attorney. This article focuses on durable powers of attorney used for incapacity planning as an estate planning strategy.

Non-Durable Power of Attorney

Unless it is stated to be durable, a POA is non-durable by default under California law. A non-durable POA terminates automatically if the principal becomes incapacitated. Non-durable POAs serve many valuable purposes. In an estate-planning context, POAs must be durable to address incapacity.

Durable Power of Attorney

Incapacity does not terminate a durable power of attorney. The term “durable” denotes an important difference between a Durable Power of Attorney for Financial Matters and a Power of Attorney for Healthcare.

POA for Healthcare

Calling a California healthcare POA “durable” is unnecessary. The durability of this type of POA is baked into the language that creates it. A California healthcare POA is triggered by the principal’s incapacity.

Durable POA for Financial Matters

The word “durable” is essential to distinguish a POA for Financial Matters that terminates with the principal’s incapacity from a durable POA, which does not. The California Probate Code Section requires a durable power of attorney to show the principal’s intent for the authority given to the agent, which does not terminate during any instance of incapacity by the principal. The statute provides sample language:

• “This power of attorney shall not be affected by subsequent incapacity of the principal.”
• “This power of attorney shall become effective upon the incapacity of the principal.”

Note that the first example is for a durable power of attorney that takes effect immediately upon execution and survives the principal’s later incapacity. The second example is for a springing power of attorney that takes effect only upon the principal’s incapacity. For incapacity planning, including durability language is essential to create a Durable Power of Attorney for Financial Matters.

Incapacity Planning Under California Law

The statutes governing the Durable Power of Attorney for Financial Matters and the Healthcare Power of Attorney are found in two separate sections of the Probate Code. While there is some overlap, each has its own requirements, forms, and rules.

Common Requirements

Some of the key requirements for creating a Durable Power of Attorney for Financial Matters and for a Power of Attorney for Healthcare are the same:

• A principal must be an adult with the capacity to create the document
• The document must be in writing
• The principal must sign or direct another person to sign the document in the principal’s presence
• The document must be dated
• Two adult witnesses to the principal’s signing or acknowledgment must sign the document, or the principal’s signing must be notarized by a notary public

A document lacking any of these provisions will likely be ruled invalid.

Specific Requirements

Each type of POA has unique conditions that must be met.

Financial Matters

A financial power of attorney is non-durable by default. The POA must include durability language to survive or to spring into effect upon the principal’s incapacity. The Uniform Statutory Form Power of Attorney is a statutory form used to appoint an agent for your financial matters.

This type of POA does not impose restrictions on who may serve as a witness or agent. The principal’s death terminates a Durable Power of Attorney for Financial Matters, removing the agent’s authority.

Healthcare Decisions

A California Power of Attorney for Healthcare is durable by nature. It is part of an Advance Healthcare Directive. California’s Advance Healthcare Directive is a statutory form used to designate a healthcare agent, communicate healthcare preferences, and more.

California law restricts who may serve as an agent. Neither the supervising healthcare provider nor an employee may serve as the principal’s agent. The law does provide exceptions for family members and co-workers who are employees.

Who can be a witness also faces restrictions. The witnesses cannot include your healthcare agent, healthcare provider, or your residential care facility. Their employees are also excluded. The statute requires that at least one witness not be entitled to inherit your estate as a beneficiary. If you are in a skilled nursing facility, one witness must be a patient advocate or ombudsman.

Unless the document provides otherwise, the agent retains limited authority after the principal’s death, including:

• Making anatomical gifts
• Ordering an autopsy
• Directing the disposition of the principal’s remains
• Authorizing the release of the principal’s records to fulfill their duties under the Healthcare Decisions Law

If you are confused or feel overwhelmed, consider speaking to a California estate planning attorney.

How To Revoke Your POA

If the person you appointed as your agent is no longer the right person for the role, you can remove them. You can revoke your Durable Power of Attorney for Financial Matters or your Power of Attorney for Health Care at any time, as long as you still have legal capacity. In both cases, a written, dated, and signed revocation, delivered directly to the agent, is the best option, but not the only one.

To revoke a Durable Power of Attorney for Financial Matters, the only requirement is that it be in accordance with the terms of the POA or by writing. You should provide written notice to any banks, financial institutions, or other third parties who have been relying on the POA. California law protects the agent and third parties who act in good faith on a POA without actual knowledge that it has been revoked. For this reason, written notice to the affected parties is essential for your revocation to be fully effective.

Although you can revoke most parts of your Advance Healthcare Directive with any act showing your intent, such as ripping up the document, the requirements for revoking your Power of Attorney for Healthcare are different. For a healthcare POA, an agent’s authority is only removed by a signed writing or by personally informing the supervising healthcare provider.

For both types of POA, it’s a good idea to destroy all copies of the original document after any revocation. Like any estate planning tool, it’s important to revisit your incapacity-planning POAs after any major life event. This includes marriage, divorce, significant illness, a substantial change in family relationships, or your named agent’s death.

What Happens if You Become Incapacitated Without a Durable POA in Place?

Adding durable powers of attorney to your estate plan is a proactive and private way to plan for your potential incapacity. The alternative may be a court-appointed conservatorship. There are two types of conservatorships:

• Conservatorship of the Person: Makes health care and personal decisions
• Conservatorship of the Estate: Manages finances and property

On petition by an interested person, the court may appoint one or both. Aside from losing your say in who has authority over important decisions during your incapacity, conservatorship is costly, public, and court-supervised. A well-drafted Durable Power of Attorney for Financial Matters and Power of Attorney for Healthcare can help avoid this outcome.

Consult an Experienced Power of Attorney Lawyer

Incapacity can happen at any time. If you want to take charge of the decision-making that will happen on your behalf during an incapacity, you’ll need to prepare. You may not need a lawyer to create a durable power of attorney, but it’s a good idea if you’re uncertain about any aspect of the process.

For many people, California’s statutory forms or an online DIY form will fit the bill. For a customized incapacity plan, consider meeting with a California estate planning attorney for legal advice. An attorney takes the time to understand your specific goals and helps you plan for them. Making certain that a trusted person is ready to carry out your healthcare and financial decisions if you’re unable to helps make sure your wishes are met.