Powers of Attorney
I’m named as a power of attorney [actually, you are named as agent or attorney-in-fact, ed.]. What does it mean?
Q. A person has named someone to be their agent in financial matters in case of a possible need in the future via a durable power of attorney. What does the agent do once there is a need for help or to act on behalf of the person because of cognitive decline and inadequate communication skills? What does the agent have to do to help or represent the person needing assistance or representation in their financial matters?
— Getting ready
A. We’re glad you’re asking.
It’s important to be prepared to act in this very important function.
A power of attorney is a written instrument by which an individual — the principal — authorizes one or more other individuals to perform the acts specified in the power of attorney for the benefit of the principal, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.
The named person is known as the agent or attorney-in-fact.
Acting as an agent under a durable power of attorney is a significant responsibility, Romania said.
“As an agent, you exercise your powers on behalf of the principal by presenting the power of attorney to the financial institution or other third party,” she said. “In most instances, a financial institution will insist on a review by its legal department before you are permitted to act and this will take time; therefore, when possible, it is recommended for the principal to have the power of attorney approved by the financial institution before it is needed.”
When acting as an agent, it is important to execute documents and/or make any representations solely as the agent of the principal and not in your individual capacity, Romania said.
For example, you would sign a document with your name followed by “attorney-in-fact for [name of principal].”
Records should be kept of all transactions as you may need to account at a later date for any monies utilized, Romania said.
Your authority as agent under a power of attorney terminates upon the death of the principal, she said.
If you have any questions about using a power of attorney in a real estate transaction, we'll be glad to answer. Our website has a form.
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