Power of Attorney for Finances -- Formalities

There are a few technical requirements with which you must comply before a power of attorney for finances will be considered legally valid and binding.

Signing

Every state requires that you sign your durable power of attorney document. This is to ensure that you understand the document and that it contains your true wishes. In most states, the attorney-in-fact does not have to sign the document. Every state except California requires that you sign your document in the presence of a notary public. In California, you may choose whether to have your document notarized or witnessed.

Notarizing

A notary is a public officer authorized to verify signatures on documents. Most likely, it will cost you a small amount of money to have your documents notarized. If you do go to a notary, you must be able to prove to her that you are who you claim you are, so be sure to bring some identification.

Witnessing

Although most states do not require the durable power of attorney document to be signed in front of witnesses, it is still a good idea to have witnesses watch you sign and then sign themselves. One reason for this is that signatures from witnesses may make the power of attorney more satisfactory to those that your attorney-in-fact may have to contend with. Another reason to have witnesses is so that there are people who can attest that you were of sound mind and legal age when you made the document. This can be important if someone later challenges your capacity to execute a valid durable power of attorney.

If you have witnesses, they must be present when you sign the document in front of the notary. The general requirements for witnesses are that they be mentally competent and of legal age. Also, try to choose witnesses that live nearby and will be easily available if necessary. In order to avoid any appearance of irregularity, the person that you name as your attorney-in-fact should not be a witness.

Recording

If you live in North Carolina or South Carolina, you are required to record your power of attorney in order for it to stay in effect if you become incapacitated. If you live in any other state, you are required to record your power of attorney only if it gives authority over your real estate to your attorney-in-fact. Such recording is necessary to enable your attorney-in-fact to sell, mortgage, and transfer your real estate. There is no time limit as to when you must record your power of attorney document. Because your attorney-in-fact can always record your document later, you may not want to record it immediately if you created a springing power of attorney that may never take effect.

If you are recording the document to give your attorney-in-fact authority over real estate, take the document to the registry of deeds office in the county where the real estate is located. If you are recording the document for any other reason, take the document to the registry of deeds office in the county where you live. County practices vary widely and you should check with the registry of deeds office before you finalize your power of attorney to be sure that you have complied with the local recording procedures. Requirements may include filing an original document instead of a copy and having a certain size margin on the first page of the document to allow for the filing stamp.

Be aware that if you are a California resident and your power of attorney document gives your attorney-in-fact authority over your real estate, you should choose to have your document notarized instead of witnessed because it must be notarized in order to be recorded.

Keeping Your Document

If you created an immediate power of attorney, you should give the finalized power of attorney document to your attorney-in-fact because she will need the original document to act on your behalf. If you named more than one attorney-in-fact, give the original document to one of them. You can give copies of the document to those that your attorney-in-fact may have to deal with, which may eliminate hassles later. However, keep a list of everyone that receives a copy because they each need to be notified if you later revoke the power of attorney.

If you created a springing power of attorney, you should keep the finalized power of attorney document in a safe place where your attorney-in-fact can easily get to it. Note that this likely does not include a safe deposit box. Although you can give copies of the document to those that your attorney-in-fact may have to deal with, it may be premature to do so. Again, keep a list in case of revocation.

Copyright 2007 LexisNexis, a division of Reed Elsevier Inc.