A power of attorney is a written authorization for one person to represent or act on someone else’s behalf in business or other legal matters, and private affairs. The person authorizing the other to act is the principal, grantor, or donor (of the power). The individual granted the power of attorney is the “agent,” or the attorney-in-fact.

An agent is a fiduciary for the principal, meaning the agent must act with the highest standards of good faith, fair dealing and undivided loyalty with respect to the principal. The actual and specific authority or power granted to the agent is set forth in the document giving him or her power of attorney. These powers can be broad and wide ranging, or very narrow and specific.

In appointing an agent, one must be very careful to appoint someone of utmost trustworthiness. A notable appointment is that of Yoko Ono, by John Lennon. For better or for worse, Ono reportedly used the power of attorney to invest Lennon’s money in real estate, art, Egyptian artifacts, and even livestock; Lennon died with an estate worth a reported $330 million.

Often times, the power of attorney does not become effective until the principal loses mental capacity, or upon the occurrence of some other specified event. This is called a “springing” power of attorney. Sometimes the power of attorney terminates upon the principal’s incapacity; if it does not, it is referred to as a “durable” power of attorney. In all events, it terminates upon the principal’s death.

Per California Probate Coe section 4121, a power of attorney is legally sufficient if all of the following requirements are satisfied:

  1. The power of attorney contains the date of its execution.
  2. The power of attorney is signed either (1) by the principal or (2) in the principal's name by another adult in the principal's presence and at the principal's direction.
  3. The power of attorney is either (1) acknowledged before a notary public or (2) signed by at least two witnesses, other than the individual being given the power of attorney, and who are adults.

If there is more than one power of attorney for an individual, and the documents conflict, the most recently executed document will control.

It’s important to note that power of attorney is distinct from trustee; in fact, in most ways, these roles are mutually exclusive. A trustee has management and authority over all asset held by the trust of which they are trustee, but nothing else. An agent has authority (depending on the powers granted to him or her) over all other property NOT in trust. It’s also important to distinguish between a power of attorney and a health care power of attorney, also called a health care agent. A health care agent is someone designated to make health care decisions for the principal, in the event the principal cannot do so him or herself.