Power of Attorney: How Is It Used, and when Does It Terminate?

By marina-sarabia October 6, 2016

Power of Attorney: How Is It Used, and when Does It Terminate?Power of Attorney: How Is It Used, and when Does It Terminate?

By Barbara Pronin
A Power of Attorney (POA) is a legal document that grants authority to one person (known as the agent) to administer all or some of another person’s affairs. It may be used for a variety of reasons when the grantor (known as the principal) is unavailable.  As a real estate agent, you may encounter times when a POA is presented on behalf of an absentee buyer or seller.

A Power of Attorney should be provided to the designated attorneys, escrow closer and/or title company as soon as possible for review and approval. As your title company resource, we are here to answer your questions and help ensure your transaction proceeds seamlessly. Allowing for variations from state to state, the following are helpful guidelines when considering the use of a POA:

  • Additional documentation in the form of a POA affidavit may be required
  • An original, notarized copy of the POA may need to be recorded in the same county where the property is located
  • A seller may not be able to use a POA if there is a recorded homestead interest in the property
  • If the buyer is using the POA, and is applying for a loan, the lender will need to approve the POA
  • When title to the property is, or will be vested in a trust, a copy of the trust must be provided to the title company for review to determine if a POA can be used

Each state has its own power of attorney laws that determine the effect of death, although many follow the legal rules set out in the Uniform Power of Attorney Act. Among other things, the act provides that the POA terminates when the principal dies; this rule is followed in all states. When the principal dies, the principal’s successors take over management of his or her affairs.

The Power of Attorney also terminates upon the death of the agent performing Power of Attorney duties. For this reason, some states recommend that the principal should include in a POA a successor agent – someone who can continue as agent if the original agent dies or is unable to carry out his or her duties.

Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.

Reprinted with permission from RISMedia. ©2016. All rights reserved.

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