What is Power of Attorney?
When someone gives Power of Attorney to another person, they are authorizing that person to act on their behalf in specific legal, medical, or business matters. The person giving Power of Attorney is considered the grantor, and the person receiving POA becomes attorney-in-fact.
How is Power of Attorney Granted?
Your legal or estate planning professional can help prepare a Power of Attorney document. Specificity is key – they will use terms such as “convey, mortgage, encumber, or execute” to declare exactly what the attorney-in-fact is being authorized to do. The POA must be signed and notarized, then recorded in the office of the County Recorder. If any Real Estate related transaction is to rely on the Power of Attorney, it must be recorded in the County in which the property lies.
For Real Estate Transactions
Sale of a property
The grantor’s name (on the POA) must be identical to the grantor’s name as appearing on title to the property. Your title company can help you determine the exact name and vesting of any owner on title to a property. When signing the Grant Deed for the sale, the attorney-in-fact’s name must be identical to his or her name on the POA.
New loan (encumbrance) on a property
The same requirements as a sale must be met with regards to the matching of names between the recorded Power of Attorney and the documents executing the transaction. The borrower will also want to confirm with the lender that they accept POA, and what type of POA would be needed – general or specific
How long does POA last?
There is no expiration date for a Power of Attorney unless explicitly stated on the document. However, title companies often require additional documentation if the POA is more than a year old when a transaction is to close. This is typically done with “Affidavit confirming authority under Power of Attorney.”
What else do you need to know?
- When a title company insures a transaction, fraud prevention is a priority. They may ask for more information, such as why a POA is being used for a particular transaction.
- Title companies will not insure the act of an attorney-in-fact if they are conveying the property to themselves or giving it away as a gift.
- Power of Attorney is generally not accepted when the property is held in a Trust
Remember to always consult a legal or estate planning professional when considering the use of a Power of Attorney! An untrustworthy attorney-in-fact could fraudulently sell or encumber your assets or use your credit.