Power of Attorney
The concept of a power of attorney stretches back to medieval times from the Old French word attorner: to agree to continue as a tenant when ownership of property changed. Tenants would find someone to act for them in handling these agreements and that person would become their attorney. The term attorney today has become a generic name for members of the legal profession who represent others in many types of transactions. However, in the phrase “power of attorney” the original medieval sense still controls since any competent person can act as the attorney, or agent, for another by the grant of a power of attorney.
Powers of attorney are most commonly associated with estate planning during which persons create durable powers of attorney for health care and for managing their assets in case of incapacity. Another use of powers of attorney is for handling matters concerning real property when the owner of the real property is located in a different location or has other reasons for having an agent handle the property but is not incapacitated. The person granting the power of attorney is known as the principal and the person to whom the powers are granted is known as the attorney-in-fact or agent. Powers of attorney, if correctly drafted, acknowledged and translated, are effective across state lines and national boundaries.
Powers of attorney can be general in scope or limited to specific transactions or powers. The power of attorney can be granted for an indefinite period or for a specified period of time. Once granted, unless a power of attorney has a specified time limit, it must be revoked in the same manner as it was granted. If an agent is to be given the power to manage real property, including the power to sell the property to a third party, the power of attorney should contain specific authority including the words “to grant and/or convey” the property. Powers of attorney concerning real property must be acknowledged (notarized). There is no statutory requirement that the power of attorney be recorded with the County Recorder in the county where the real property is located. If the power of attorney is recorded voluntarily, then the revocation of that power of attorney must also be recorded voluntarily in each county where the original power of attorney was recorded.
If there is a power of attorney affecting real property, execution of documents must be in the name of the principal. The signature line shows the principal’s name and the agent’s signature, for example Jane Smith by Roberta Brown her attorney-in-fact. The signature of the agent must be acknowledged.
While useful, the granting of a power of attorney can have serious consequences if not properly drafted, if used in the wrong situation or if given to an unscrupulous person. Anyone contemplating the use of a power of attorney should do so only with sound legal advice from an attorney in the modern sense.