- Legal EditorHenry Dahut, J.D.
Henry Dahut, J.D.
Attorney - Legal Publisher - Educator
Henry Dahut is a licensed California trial attorney. Over the course of his 30-plus years practicing law, Henry has represented and counseled countless clients in legal trouble.
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How Does “Power of Attorney” Work?
Q. My father has been terminally ill and wants to make sure that should he become incompetent or unable to manage his finances, someone within the family will do that for him without having to be a joint account owner. Can a Power of Attorney help us accomplish my dad’s wishes in this regard?
A. Yes, a power of attorney is an excellent alternative precisely for that purpose. It allows a person so designated to manage the account until the time your dad passes away. However, at the moment of death, a power of attorney is extinguished, and the agent will have no ability to act on behalf of the decedent. For this reason, you will want to have a Pay-On-Death Beneficiary (POD) on the account if you intend to avoid probate without having to have a joint account owner.
Power of Attorney Explained
A power of attorney is an arrangement under which one person (called the “principal”) gives someone else (called the “agent” or the “attorney-in-fact”) the power to act on their behalf. The term “attorney” here is not the same as “lawyer” – any competent person can serve as the “agent” or “attorney-in-fact,” even if that person has no legal training.
The powers given to attorney-in-fact can be as limited or broad as the principal wishes. Most powers will end when the principal becomes incompetent, but a “durable” power continues during the period of incompetence.
Durable Power of Attorney
A durable power of attorney can be made effective immediately, or it can be written so that it “springs” into action only if the principal becomes incompetent. A springing power has the advantage of keeping complete control in the principal’s hands until the power is needed. Of course, the disadvantage is that it might be difficult to tell when the principal becomes incompetent.
You invite litigation if you provide that the power springs into being “upon incapacity.” The document should define “incapacity” and designate a committee (perhaps a doctor and named family members) to certify that incapacity exists.
As long as you remain competent, you can revoke or change your durable power of attorney in any way you wish, including the appointment of a new attorney-in-fact.
