{"id":1291,"date":"2021-03-12T10:00:35","date_gmt":"2021-03-12T15:00:35","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=1291"},"modified":"2024-04-25T23:20:03","modified_gmt":"2024-04-26T03:20:03","slug":"creating-a-power-of-attorney","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/creating-a-power-of-attorney\/","title":{"rendered":"Creating a Power of Attorney"},"content":{"rendered":"\n

A Key Planning Tool for a Homeowner\u2019s Future <\/em><\/strong><\/h1>\n\n\n\n
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With a power of attorney (POA), you can appoint a trusted,\ncompetent person to act for you later, if you can\u2019t carry out real estate\ntransactions on your own behalf. In POA lingo, you are the principal<\/em>,\nand your trusted person becomes the agent<\/em> or attorney-in-fact<\/em>\n(not to be confused with a real estate agent or an actual attorney!). <\/p>\n\n\n\n\n\n\n\n

A valid POA has to be created and signed when you\u2019re still\nmentally able. Therefore, it\u2019s really never too early to plan for the transfer\nof your home when it could be necessary. <\/p>\n\n\n\n

There are financial POAs, which name the agent to handle any\nor all of your financial affairs. And there are limited POAs, which specifically\nauthorize your agent to manage your real estate. <\/p>\n\n\n\n

Each state has its own regulations governing the power of attorney<\/a>. And each state has certain rules that apply to real estate transactions specifically. Some may require specific language in the POA showing your agent has accepted the POA, some may say the notary public cannot be one of the witnesses when the POA is executed, and so forth. <\/p>\n\n\n\n

Wherever you are, state law controls.<\/p>\n\n\n\n

How Powers of Attorney Come Into Effect<\/h2>\n\n\n\n

Check both state law and your county\u2019s rules on durable, springing,\nand limited POAs to know what is permitted and what will work best in your\nsituation. Here, we provide a basic orientation to the POAs usually picked for\nincapacity \u2014 durable, and springing.<\/p>\n\n\n\n

The durable power of attorney is often chosen for\nassigning another person the ability to sign for the homeowner in a real\nestate transaction, with specific property described in the document.\nUnlike the non-durable power of attorney, a durable POA remains in force if you\nbecome unable to carry out transactions. Before then, you may revoke or modify\nyour durable POA \u2014 and it\u2019s best to tell those involved if you do, so they\ndon\u2019t rely on your prior version. Indeed, your state might mandate a written\nrevocation notice to inform your appointed agent. <\/p>\n\n\n\n

Some homeowners write termination dates into their POA\ndocuments, forcing themselves to review and update their instructions from time\nto time, so the power doesn\u2019t linger with ex-spouses or ex-friends, or someone\nwho has passed. This brings up the importance of naming at least one successor\nagent \u2014 just in case your preferred agent can\u2019t serve when the time comes. If\nyou appoint more than one agent, everyone you name will need to sign\nagreements, disclosure documents, and so forth. <\/p>\n\n\n\n

Using the POA, your agent can ultimately pass the home title\non \u2014 whether by selling your home, or conveying it to a family member, friend,\nor charity. Your agent can do so without any changes to your will. The durable\npower ends when you pass away. Then, the county probate court opens a probate\ncase for your estate. If\nyou wrote a will (and you should!)<\/a>, the court will approve the\nexecutor you named in the will to manage your estate from there.<\/p>\n\n\n\n

Can you have your POA take effect only if and when you\nactually become unable to handle your transactions? Yes. This is a springing power\nof attorney. <\/em>This document clearly describes a situation that gives your\nagent the power to sign papers on your behalf. When your agent presents a springing\nPOA to the title company, the examiner may require certification from your\ndoctor that you are incapacitated, and the history and background of your\ncondition.<\/p>\n\n\n\n

Important note:<\/em><\/strong> A conventional POA form will\nnot work to transfer real estate when you intend to create a durable or springing\nPOA.<\/p>\n\n\n\n

Tips for Creating an Effective Power of Attorney <\/h2>\n\n\n\n

If you ever become unable to carry out your own\ntransactions, but you haven\u2019t prepared for this situation, a court could be\ncalled upon to intervene. The court might appoint a conservator to handle your\nbusiness. But if you create an effective POA, you can avert the crisis. To\ncreate an effective POA instrument:<\/p>\n\n\n\n