Like all states, California allows you to assign power of attorney to a third party. This person, known as your “agent,” can then act with your authority and take legal, financial and medical actions on your behalf. A power of attorney is a highly state-specific area of the law. Every state establishes its own rules for how this works and how you assign and revoke this authority. California’s laws are similar to power of attorney laws applied in most jurisdictions. There are very few differences between how power of attorney works in California as compared with most other states, and no particular reason to choose this jurisdiction over any other if you are looking for an agent. Here’s what you need to know.
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What Is Power of Attorney in California
Power of attorney is an assignment of authority and rights. When you give someone power of attorney, you allow them to act on your behalf in legal, financial and medical matters. They can sign contracts, access money, file your taxes, take out debts, buy or sell property and otherwise take most legal or financial actions in your name. In California, as in most states, there are very few limits on the authority you can give to your agent. Perhaps the most significant restriction is that your agent cannot alter your will.
Your agent only has the authority that you give them. When you give someone power of attorney, you also specify the scope of this grant. They cannot act on your behalf outside of this scope, although they have full discretion within it. For example, it’s common to give your accountant power of attorney for the purposes of accessing and filing your taxes. This lets your agent access tax forms from the IRS, but they couldn’t take out a bank loan in your name.
If you do not specify the grant of authority, your agent will receive what’s known as “general power of attorney.” This means that they can take any permissible action, with no restrictions except for the boundaries of power of attorney law. This is generally not wise. In most cases, you are better off giving a specific assignment that meets your needs.
Like most states, California broadly recognizes two types of assignments: Financial and medical. Giving someone financial power of attorney lets them act on your behalf in legal and financial matters. Giving someone medical power of attorney lets them make medical decisions on your behalf if you are incapacitated.
In California, by default power of attorney is what’s called “durable.” This means that your grant of authority continues even if you are incapacitated. Alternatively you can specify conditions or duration, a “limited” power of attorney, in which case the grant will end once those conditions have been met. Otherwise, a power of attorney assignment will continue until you rescind it or you die.
By default, California power of attorney assignments take effect once the document is signed. However you can also write conditions into the grant, so that the power of attorney only takes effect under certain conditions. This is known as a “springing” power of attorney. For example, it’s common to write a medical power of attorney that only takes effect if you are incapacitated or unconscious.
Giving and Rescinding Power of Attorney in California
California power of attorney is governed by its Probate Code section 4400 – 4545. And to give someone power of attorney in California, the grant must be made in writing. The document must contain specific language detailed in Probate Code Section 4401. This language is basically a disclosure about the risks and nature of power of attorney assignments.
While the probate code does not require you to use any specific form, because of the requirements around specific language it’s usually best to use a prepared form. If you draft your own power of attorney document, there’s a good chance that you will make a mistake around the required disclosures and invalidate the entire document.
When you sign the power of attorney form, it must either be notarized by a notary public or signed by two witnesses. Whichever you use, the notary or the witnesses, you have to sign the document in their presence. Your agent must also then sign and date the power of attorney form. Your agent cannot act as one of the witnesses. In some conditions, typically nursing homes or related facilities, you must also have a patient representative witness the grant.
You, your agent and your witnesses (if applicable) must all be over 18 and must be legally competent. The competence requirement means you must have the capacity to understand the nature and quality of your actions, so that you can sign a binding contract.
When someone does not have mental capacity, you can get power of attorney ordered for them by a court. If a judge agrees that someone cannot safely manage their own affairs, they can grant your power of attorney over that person’s assets.
In California, as in most states, you can revoke your power of attorney at any time for any reason. Your agent cannot contradict your decision to revoke this authority, nor can the power of attorney form limit your ability to revoke it. While it is best to revoke power of attorney in writing, and most forms call for a notary, you are only legally required to notify your agent. This can include telling your agent that you have revoked their authority. The only exception to this is with custodial power of attorney, which can only be revoked by a court order.
Bottom Line
Power of attorney in California is similar to most other jurisdictions. Your agent can act on your behalf in legal, financial and medical matters. To give someone power of attorney, you need a written document that meets the state’s statutory requirements and either a notary or two witnesses.
Power of Attorney Tips
- If you need help managing your estate, a financial advisor can help guide you through the estate planning process. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- When you die, your estate will typically go through probate, which is the court-supervised process that validates a will, settles debts and distributes assets. This can be a potentially lengthy, costly and a public process. However, there are ways to avoid probate, including transferring assets to a living trust or using transfer-on-death designations.
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