Q. My father signed a durable power of attorney a few years back, making it effective only in the event he later became unable to handle his own financial affairs. Sadly, I think that time has come. How do I activate it so that I, whom he designated as his agent, can now act for him?
A. Excellent question! As part of my answer, some background may be helpful: Broadly speaking, there are basically two kinds of Powers of Attorney (“POA’s”): those that are (1) immediately effective upon signing, and (2) those that become effective only later, upon the occurrence of a specific event, which is usually the incapacity of the signer, whom we call the principal. The latter are often called “springing” powers of attorney, as they only spring into life upon the occurrence of that event.
From your description, it appears that your father’s POA was a “springing power”, becoming effective only upon his incapacity, which is usually described as “the inability to manage his personal or financial affairs, resist fraud or undue influence”, or by words of similar import. It probably also indicated that proof of same should come from a doctor who examined him and who then felt that he had reached that level of incapacity.
So, what you should do now is contact his physician, arrange for an assessment of your father’s mental status and, if the doctor feels that your father is now incapacitated under the definition used in the POA document, the doctor should write a letter to that effect. That letter should reference the provision in the POA that triggers the effectiveness, include the doctor’s opinion as to the underlying medical diagnosis (e.g. dementia, Alzheimer’s, or other malady) which now renders him unable to handle his financial affairs (using the definition of incapacity in the POA document as closely as possible), and provide the doctor’s opinion that, in fact, your father now meets that test.
Importantly, the doctor should end his or her letter, with the following words, which effectively turns the letter into an affidavit, and thereby qualifies that letter as the triggering document under the California Probate Code:
“I declare under penalty of perjury that the foregoing is true and correct”.
You should then be prepared to either show that doctor’s letter, or a copy, to any third party, such as a bank, whom you would need to honor the POA, or you might just attach a copy to the POA document, itself.
Many POA’s actually require two (2) physicians to each render such an opinion in order to trigger the effectiveness of the POA. If that be the case with your father’s POA, then you would need to seek out two doctors who would each write such a letter.
Sometimes POA’s provide that the determination of incapacity is to be made by a designated family member and/or by that family member and one (1) physician. In that case, each of those persons should write a letter rendering their opinion that your father is now incapacitated (preferably quoting the definition of incapacity used in the POA itself), and each such letter should end with the declaration phrase recited above, converting each letter into an affidavit under California law.
Note: following the above procedure does not necessarily guarantee that third parties, such as banks or other financial institutions, will always then honor the POA. However, if their refusal is unreasonable, you may then be entitled to seek a court order compelling them to do so, in which case the court may then have the authority to award you reasonable attorney fees for your undertaking. However, short of a court proceeding, we have found that a well-placed letter from your attorney to the bank or other third-party, calling attention to the fact that the conditions provided by your father in the POA have been satisfied, will often result in the compliance that you seek.
