Monday 19 June 2017

Power Of Attorney

Posted by at 8:00 AM

Power Of Attorney

A power of attorney (POA) is a written authorization to act or represent another in their personal dealings. The power authorizes an "agent" or "attorney in fact" to perform certain stated acts with the same authority as the grantor. The grant can be for a general power or a specific transaction. It may be durable where the grant remains effective even if the grantor is incapacitated. The delegation of powers may be for convenience or out of necessity. Whatever the case, it is always important to evaluate the reliability of the grant and make sure the power covers the transaction.

There may be situations where a power of attorney is a vehicle for fraud, and sometimes there should be closer scrutiny of the parties to the transaction. Be alert for warning signs such as a rushed closing or proceeds paid exclusively to one sibling.

Is the grantor deceased? A power of attorney ceases at death as the estate inures to the interest of the decedent. If you suspect the grantor of a power of attorney is deceased, you should conduct an online search for an obituary. All and all, if you feel something is off, give pause and investigate further.

Recently, we reviewed a POA that gave the attorney in fact the power to "sell real estate and buy personal property". Only problem, the transaction was to purchase property and execute a purchase money mortgage. The attorney in fact lacked sufficient authority and we had to reject the power of attorney as insufficient. The goal should be to make sure the attorney in fact has the requisite authority.

There are also questions of whether a power of attorney may be exercised over interests within a Limited Liability Company or Trust. In most instances, the power of attorney provides only for those acts and powers held by the grantor in their individual capacity. However, most situations are unique and if you have any questions about any specific transaction contact our office.