The English common law understands that agents are sometimes needed in business and business. Clearly, the president of Ford Motor Company is everywhere. He needs agents to do business. In addition, a person who is on vacation abroad and cannot sign a contract can appoint an agent to sign all important documents.
But under common law, agents no longer have the ability to take action from
Incapability ["the principal" is the person who gives power]. If the principal has dementia and cannot sign an agreement, his agent cannot sign it. His agent may not have more power than the principal.
Now, if you haven't thought about it all, we will all feel the effects of aging – if we are lucky. Symptoms are well known and do not require explanation. One of the most difficult symptoms to take is memory loss; it can be thought as clearly as we did when we were young. Although this is not always disabling, people often need help in this natural aging process. However, if someone is in a coma or suffering from dementia, the English common law hardly helps.
There is a durable power of attorney.
But because helpless people obviously need the help of agents most, most jurisdictions now recognize a “persistent” power of attorney [abbreviated “DPOA”]. DPOA is "persistent" because it works even when the "principal" is mentally incapacitated.
Although a non-persistent power of attorney authorizes an agent to act without capacity, DPOA resolves this issue by allowing a trusted agent or nominee to take action from
even if from
The principal lacks legal capacity – in other words, when the person is unable to legally make his or her own decision because of a mental disability.
In California, DPOA must have specific words to be "persistent." According to §4124 of the California Wills Act, it must state: "This power of attorney has an effective effect on the principal's incapacity," or that is the case.
Some benefits of DPOA
DPOA has specific benefits; in fact, I will go one step further and say that almost everyone with a formal estate plan should consider owning one. Here are some benefits:
- Usually people can avoid adult protection. One of the main benefits of having a DPOA is that it can often replace a formal music school, which is usually a cost court process that requires constant court oversight. Thus, if a person is disabled and has a properly worded DPOA, his or her agent may be able to write a check, manage finances, or take action on the person's estate plan [such as a funded trust] without specific court oversight.
- It can be effective quickly. The DPOA can take effect immediately or effectively without lengthy proceedings in the probate court.
- It should be accepted in other states. Other states should accept a valid DPOA. California has a specific statement, ProbateCode §4053, which specifically recognizes valid DPOAs performed in other states. However, for some states, this may not be the case if the document grants the state unauthorized powers. however [And this "however" is great!]: The IRS is not easy to identify the power of attorney prepared by a lawyer. Obstacles are specified in specific financial regulations [see, for example, Treas. Reg. §601.503] and IRS practices, making it difficult for agents to sign tax forms. [IRS Deskguide [Publication 1514]]. However, when the California Chartered Tax Commission signs a state tax return, the California taxpayer's valid, properly executed power of attorney should not have any problems.
- DPOA is very flexible. Specific authorizations or "powers" may be added or restricted in the jurisdiction agreement. The specific rules depend on the principal.
Of course, not everything is perfect…
Although very useful, DPOA is not perfect. A major problem is the possibility of abuse.
Although preservatives are a huge legal process, they are at least supervised by the courts. The lack of supervision and abuse of DPOA occurs frequently. Although the protector must skip many legal hoops, there is no active court oversight or "hoop" agent under the DPOA. For example, the State of California requires protection personnel to perform court-approved accounting for their financial activities. It also requires protection personnel to stay in touch. However, if there is no specific court order, there is no such requirement for an agent only.
Court proceedings can be filed, but this is usually unrealistic. During court proceedings from
were able from
It is rare for a person to force, for example, an agent to submit an accountant or to revoke an agent. There is a big difference between the supervision of court supervision and the submission of petitions to the court.
Anyway, who will submit a petition to the court? Remember: from
The principal is mentally incapacitated! from
Unconscious people usually cannot make a will request to force their agent to be responsible!
Of course, there are risks that can be solved [but not completely] through well-designed documentation and some common sense precautions. DPOA may not be suitable for everyone. However, everyone should at least consider DPOA as an element of their heritage plan. Effectively drafted DPOAs can “improve” a comprehensive plan and fill gaps not covered in trusts and wills.
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