A Durable Power of Attorney for Property Management (DPOA) is a legal instrument that allows a principal to authorize an attorney-in-fact to manage their property, even if the principal becomes incapacitated. This is akin to a Durable Power of Attorney for Health Care, which deals with health-related decisions. Here’s a comprehensive look at what a DPOA entails and its legal implications.
Key Characteristics of a Durable Power of Attorney
Continuity Despite Incapacity: A DPOA typically includes language indicating that it remains effective despite the principal’s incapacitation or activates upon the principal’s incapacitation. This ensures that the attorney-in-fact can manage the principal’s affairs without interruption due to the principal’s inability to make decisions.
Authority Scope: The authority granted under a DPOA can be comprehensive or limited. It can encompass all of the principal’s property or specific assets, covering real estate, personal property, and assets acquired after the DPOA’s execution. The geographic scope can also be broad, including property within or outside California.
Legal Framework
DPOAs are governed by the Power of Attorney Law, embedded in the Probate Code since January 1, 1995. This law restructured previous statutes to highlight the estate planning nature of DPOAs and distinguish personal from business-related powers of attorney. Despite this specialization, general agency laws apply unless the Power of Attorney Law provides specific rules.
Roles and Capacities
Principal: Any competent adult can execute a DPOA, provided they are not a minor, of unsound mind, or otherwise deprived of civil rights.
Attorney in Fact: Must be capable of contracting and be either a natural person or a corporation. The principal can appoint multiple attorneys-in-fact, who must act unanimously unless the DPOA states otherwise.
Authority and Limitations
An attorney-in-fact under a DPOA can perform any act the principal might do, except those requiring personal attention, like voting or marriage. They can handle financial transactions, manage property, and even make healthcare decisions, but they cannot make or revoke the principal’s will.
Specific actions, like creating or modifying trusts, making gifts, or changing beneficiary designations, require express authority under the Probate Code. Without such express authority, these actions cannot be performed by the attorney-in-fact.
Duties and Responsibilities of an Attorney-in-Fact
An attorney-in-fact has fiduciary duties to act prudently, keep the principal’s property separate, and avoid conflicts of interest. They must follow the principal’s instructions, maintain regular communication, and keep accurate records of all transactions.
Standard of Care: Attorneys-in-fact must manage the principal’s property with the care of a prudent person. Those with special skills must apply those skills diligently.
Record Keeping: Detailed records of all transactions are mandatory, and these records must be provided upon the principal’s or court’s request.
Special Types of DPOA
General vs. Special: A general DPOA grants broad authority over all the principal’s affairs, while a special DPOA is limited to specific actions or matters.
Springing DPOA: This type of DPOA activates upon the occurrence of a specific event, typically the principal’s incapacitation. It requires clear criteria for determining when the event has occurred, often through a written declaration by a designated person.
Protect Your Orange County Property with a DPOA Today!
Drafting a DPOA requires careful consideration to ensure it meets the principal’s needs and complies with legal standards. That makes working with an experienced estate planning attorney a wise choice.
Trust the team at OC Trial Group to help you prepare a DPOA that clearly defines the attorney-in-fact’s powers and helps to avoid disputes. Knowing that creating a power-of-attorney is not a once-and-done arrangement, we can assist with periodic reviews and updates to ensure it remains relevant and aligns with your wishes. Don’t leave the management of your property to chance. Talk to our experienced Orange County estate planning attorney about a DPOA today.