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If you slipped and hit your head, and ended up in the hospital in a coma, who would manage your finances?  Does that person have the legal authority to access your accounts, pay your bills, and handle your property?  If you are a senior, you should know the answer to these questions.  Anyone can become incapacitated, and planning for this can save you and your family a lot of time, money, and headache.  A Durable Power of Attorney is one of the key documents to plan for incapacity.

What is a Durable Power of Attorney and how does it work?

  • It is a legal document that lets you appoint a trusted person (your “agent”) to manage your finances.
  • You can choose to have your agent manage your finances now if you want or need help right away.
  • It can be “springing,” which means it does not take effect until you are unable to make financial decisions for yourself. “Durable” means that the document stays in effect after you are incapacitated.
  • You can authorize your agent to handle specific personal and family maintenance, banking, and other financial transactions.

Why is a Durable Power of Attorney important?

  • It enables someone to manage your financial affairs when you are unable to do so.
  • Your family or loved ones can more easily take care of you if you become incapacitated.
  • It may diminish the need for a conservatorship.  Conservatorships are expensive and cumbersome legal processes in which a court appoints a legal representative to handle your financial and personal affairs.

Questions to ask yourself when appointing an agent:

  • Is this person willing to handle financial matters for you?
  • Do you trust this person enough to have broad authority over your finances?
  • Is your agent the same person who is your agent for health care or does he/she get along with that person?
  • Would this person be able to act on your wishes and not his/her own?
  • Will this individual be available in the long into future to handle your finances?

Basic responsibilities of an agent:

  • Act in your best interests and to handle your finances honestly and prudently.
  • Keep your property separate from his/her own and keep adequate records.
  • Keep you informed and follow your instructions as much as possible.
  • Use any special skills that the agent has.
  • An agent cannot give him/herself a “gift” without express written permission from you.
  • The agent can receive reasonable compensation and reimbursement for reasonable expenses incurred on your behalf. However, in family situations, an agent is normally not paid if the duties will not be complicated.

Free appointments with an attorney from Contra Costa Senior Legal Services are available.