ATTORNEY NEWSLETTER
Financial Powers of Attorney and the Elderly
Legal Requirements for powers of Attorney in California
A financial Power of Attorney (“POA”) is an important legal document where a principal authorizes an agent to act on the principal’s behalf in business transactions and more.[1] Someone with a financial Power of Attorney has legal authority to transfer money, pay bills, sell a home or other assets, and complete other financial transactions unless the Power of Attorney expressly limits the agent’s power. If a senior becomes incapacitated by dementia or illness, POAs are may be necessary to allow a trusted agent to pay bills and make important financial decisions. In California, the POA form is set out in the Uniform Statutory Power of Attorney Act. Cal. Probate Code §§ 4400 et seq. The estate planning attorneys at Evans Law Firm, Inc. provide POAs as part of the firm’s estate planning services. Click on “Estate Planning” under the firm’s “Practice Areas” tab.
California Requirements and Validity of Out of State POAs
In California, a POA on the statutory form is legally sufficient if all of the following requirements are satisfied:
a) The power of attorney contains the date of its execution.
(b) The power of attorney is signed either (1) by the principal or (2) in the principal’s name by another adult in the principal’s presence and at the principal’s direction.
(c) The power of attorney is either (1) acknowledged before a notary public or (2) signed by at least two witnesses who satisfy the requirements of Section 4122.[2]
Cal. Probate Code § 4121 (emphasis added). A POA executed in another State is valid and enforceable in California as long as the POA was executed in compliance with the laws of the State where executed or the laws of California. Cal. Probate Code § 4053.
Necessary But Potential for Misuse
Unfortunately, some agents take advantage of any broad authority and act for the agent’s own benefit. The results can be devastating. The Marin and California financial elder abuse lawyers at Evans Law Firm, Inc. represent seniors and their families who suffer loss when agents misuse financial Powers of Attorney. If you or a loved one has suffered from an agent’s misuse of a POA, call us today at (415)441-8669. California law awards attorneys’ fees and costs to principals whose agents have breached their fiduciary duty under POAs. Cal. Probate Code § 4545(b). Here are a few signs that an agent may be misusing a financial Power of Attorney:
- The principal is being neglected. Maybe utility bills aren’t being paid on time, tax payments are late, or other important bills are left unpaid.
- Care expenses are ignored. Late payments and cancelled services may indicate that the principal’s money is not being spent on the principal but is being diverted by the agent.
- The agent is making unauthorized payments to himself or herself. Under California law, an agent under a Power of Attorney is entitled to reasonable compensation for services. Calif. Probate Code § 4204. However, the principal may limit the power of the agent to make any payments to himself and the provisions of the Power have priority over the statute on compensation. Calif. Probate Code § 4101.
- The agent has embezzled money from the principal’s bank accounts or caused a benefit like Social Security to be paid to the agent.
- The agent is making gifts or creating or amending a trust agreement without express authority to do so. California law requires express authority for the making of gifts or creation or revocation of trusts by POA agents. Calif. Probate Code § 4264. Trusts can only be modified or revoked by an attorney-in-fact if permitted under the original trust instrument. Calif. Probate Code § 4264(a).
- Sudden, significant changes are made to financial and estate planning arrangements. The agent may suddenly appear as a pay on death beneficiary on bank accounts, accounts may be switched to joint accounts, or the agent opens new accounts that only he or she can access or may even know about.
- The agent prohibits visits and calls by family and friends. Or, if the elder receives visitors, the POA agent may routinely hover around to hear what is said. Attempts at isolation and control are always red flags.
Seniors need to be extremely careful in selecting their POA agents. Because POA powers are so broad, our lawyers recommend principals appoint two or more trusted individuals, so that the agents must always work jointly on matters concerning the principal. Never grant a Power of Attorney to a caregiver.
Contact Us
If you believe that you or a loved one has suffered Power of Attorney abuse or other forms of financial elder abuse here in Marin or elsewhere in California contact Ingrid M. Evans and the other California elder abuse attorneys at the Evans Law Firm at 415-441-8669 or or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys have experience with complex financial contracts, such as annuities and life insurance, and large insurance companies and cases involving Powers of Attorney, trusts, wills, and other legal instruments. We can help guide your case through a jury trial or toward an equitable settlement. We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
[1] There are also powers of attorney over medical decisions known as Advance Health Care Directives, and these are equally powerful in the appointed agent’s hand. A Power of Attorney may be “springing,” meaning that it comes into force only when the principal is incapacitated or unavailable, or “durable,” meaning that it is effective at all times until revoked or upon the death of the principal. Powers of Attorney are sometimes referred to as “mandates” or as “letters of authorization.”
[2] Both witnesses must be adults and the agent being appointed cannot act as a witness. Cal. Probate Code § 4122.
