As we started the discussion with the power of attorney California on our home page, we went further and discussed the durable power of attorney California and from popular feedback we want to touch upon what happens when the principal signer of the POA dies. What becomes of the document? The Agent? The things the Agent was supposed to protect?
Upon the date of the principal’s death, a power of attorney is immediately terminated. It is common for people to mistake a power of attorney for a trust, which does survive death. In California, there are several different types of powers of attorney. However, most people choose to create a general durable power of attorney.
A general durable power of attorney revokes the authority of all powers of attorney created before the general durable. However, there are several exceptions, such as allowing safety deposit box access, depositing funds, withdrawing funds and writing checks. The principal must create a statement of intent in order to appoint an agent. The agent of the general durable power of attorney will remain in authority until the principal is deceased.
The general durable will also include all specific powers granted to the agent. These powers may include the ability to convey personal and real property, release and execute mortgages, transfer and endorse motor vehicle titles and execute security agreements like deeds of trust. Other powers that may be specified in a general durable are the ability to endorse and receive checks, withdraw and deposit checks, have safety deposit box access and endorse, transfer and convey business interests. The agent may also change beneficiary designation and ownership of qualified retirement plans, 401Ks and annuities as well as appoint ancillary agents and prepare, file and sign tax returns.
General durable powers of attorney in California contain clauses for document reliability, document reliance, information release and ancillary agent appointment. The power of attorney will also dictate the agent’s fiduciary eligibility, compensation, liability, enforcement of authority, revocation and amendment. This document must be dated, signed and notarized.
Like a durable power of attorney, a revocable living trust is created is established while the grantor is alive. However, unlike a power of attorney, a living trust does survive the grantor’s death. After signing a Declaration of Trust, the grantor can designate themselves as trustee, allowing them to transfer assets into the trust in order to retain control over said assets. The grantor may also designate another party as the trustee, and the grantor is allowed to cancel the trust at any time. A living trust also allows the grantor to name a successor trustee. Upon the grantor’s death, the successor trustee will be given authority over all assets in the trust. The successor trustee must then transfer these assets to the beneficiaries designated in the trust or manage property allocated to beneficiaries who are minors.
It should be noted that a general durable power of attorney in California cannot be replaced with a living trust because the power of attorney immediately expires upon the principal’s death. There are other limitations to a power of attorney. For instance, it cannot direct the allocation of an estate to the principal’s beneficiaries. Furthermore, a general durable power of attorney does not grant the agent authority to make healthcare decisions for the principal. Healthcare decision authority in California is covered by an advance healthcare directive, which is another type of power of attorney.