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What is a Power of Attorney?

What is a Power of Attorney?
by Beverly Rice  Dec 2009

Do any of the following people need to sign a power of attorney?
  • Mr. Jones lives alone, has no close family, and is scheduled for major surgery in a few weeks.
  • Ms. Smith has been diagnosed with Lou Gehrig's disease.
  • Mr. and Mrs. Adams will be out of the country for the next 6 months but have a house they need to sell.
  • Ms. Davis is single, runs a successful business, and has no medical or economic concerns.

The answer is yes. They all do. A power of attorney (POA) is a document that allows you to appoint a person or organization to manage your affairs if you become unable to do so. However, all POAs are not created equal. Each type gives your attorney-in-fact (the person who will be making decisions on your behalf) a different level of control.


General Power of Attorney
A general power of attorney gives broad powers to a person or organization (known as an agent or attorney-in-fact) to act in your behalf. These powers include handling financial and business transactions, buying life insurance, settling claims, operating business interests, making gifts, and employing professional help. General power of attorney is an effective tool if you will be out of the country and need someone to handle certain matters, or when you are physically or mentally incapable of managing your affairs. A general power of attorney is often included in an estate plan to make sure someone can handle financial matters.

Special Power of Attorney
You can specify exactly what powers an agent may exercise by signing a special power of attorney. This is often used when one cannot handle certain affairs due to other commitments or health reasons. Selling property (personal and real), managing real estate, collecting debts, and handling business transactions are some of the common matters specified in a special power of attorney document.

Health Care Power of Attorney
A health care power of attorney grants your agent authority to make medical decisions for you if you are unconscious, mentally incompetent, or otherwise unable to make decisions on your own. While not the same thing as a living will, many states allow you to include your preference about being kept on life support. Some states will allow you to combine parts of the health care POA and living will into an advanced health care directive.

Durable Power of Attorney 
Suppose you become mentally incompetent due to illness or accident while you have a power of attorney in effect. Will the document remain valid? To safeguard against any problems, you can sign a durable power of attorney. This is simply a general, special, or health care POA that has a durability provision to keep the current power of attorney in effect. 

You might also sign a durable power of attorney to prepare for the possibility that you may become mentally incompetent due to illness or injury. Specify in the power of attorney that it cannot go into effect until a doctor certifies you as mentally incompetent. You may name a specific doctor who you wish to determine your competency, or require that two licensed physicians agree on your mental state.

Looking for Mr. Good Agent
Trust is a key factor when choosing an agent for your power of attorney. Whether the agent selected is a friend, relative, organization, or attorney, you need someone who will look out for your best interests, respect your wishes, and won't abuse the powers granted to him or her.It is important for an agent to keep accurate records of all transactions done on your behalf and to provide you with periodic updates to keep you informed. If you are unable to review updates yourself, direct your agent to give an account to a third party.As for legal liability, an agent is held responsible only for intentional misconduct, not for unknowingly doing something wrong. This protection is included in power of attorney documents to encourage people to accept agent responsibilities. Agents are not customarily compensated; most do it for free.Should you, a friend, or relative suspect wrongdoing on the part of your agent, report the suspected abuse to a law enforcement agency and consult a lawyer.

Can Too Many Agents Spoil the Broth? 
While you can appoint multiple agents, decide whether these agents must act jointly or separately in making decisions. Multiple agents can ensure more sound decisions, acting as checks and balances against one another. The downside is that multiple agents can disagree and one person's schedule can potentially delay important transactions or signings of legal documents.If you appoint only one agent, have a backup. Agents can fall ill, be injured, or somehow be unable to serve when the time comes. A successor agent takes over power of attorney duties from the original agent, if needed.

Being of Sound Mind. . . 
A power of attorney is valid only if you are mentally competent when you sign it and, in some cases, incompetent when it goes into effect. If you think your mental capability may be questioned, have a doctor verify it in writing. If your power of attorney doesn't specify requirements for determining mental competency, your agent will still need a written doctor's confirmation of your incompetence in order to do business on your behalf. A court may even be required to decide the competency issue in some circumstances.

Signing, Sealing, and Delivering a Power of Attorney
You must sign and notarize the original power of attorney document, and certify several copies. Banks and other businesses will not allow your agent to act on your behalf unless they receive a certified copy of the power of attorney.Attorneys are unnecessary to execute a power of attorney. However, it may be wise to consult one for advice about the powers being granted, to provide counsel on your candidate agent, and to make sure your document meets all legal requirements.Remember, you can revoke a power of attorney at any time. Simply notify your agent in writing and retreive all copies of your power of attorney. Notify any financial institutions and the County Clerk's office, if applicable, that your agent's power of attorney has been revoked.Needing a power of attorney is almost as certain as death and taxes in everyone's life. Illness, injury, old age, or daily life commitments happen to everyone. It is important to understand what a power of attorney is and how it can assist in taking care of business, even when you can't.This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

Notary Certificate Mistakes

Correcting Certificate Mistakes No Longer Allowed In California
By Michael Lewis on January 22, 2014 in Laws & Regulations


The California Secretary of State’s office issued a statement this month informing Notaries that they are not allowed to correct mistakes on a notarial certificate after a notarization is complete. While most Notaries are diligent in carrying out their duties, they are not immune from occasionally making errors in completing a notarial certificate — such as inserting incorrect dates, misspelling names or writing the wrong county in the venue.  

According to the state’s one-paragraph notice in the latest issue of the agency’s Notary News, “If you discover an error in a notarial act after completing the act, then notarize the signature on the document again. ”The NNA first became aware of this issue in 2012 when a member reported that she was being investigated by the Secretary of State’s office for correcting errors on certificates.  But this is the first time the state has published its official position.  The Secretary’s position means that if you discover a mistake after leaving the signer, you must meet with the signer again and complete a new certificate of acknowledgment or jurat.  At that time, you will need to go through all the steps required by law of a proper notarial act, including positively identifying the signer and completing a full journal entry for the transaction.  Essentially, you must perform a new notarization.  

The Secretary’s statement noted that “there are no provisions in the law that allow for the correction of a completed notarial act.”  However, the agency views correcting certificates after the fact to be a form of backdating, which is a possible criminal act and official misconduct under the law and could result in your commission being suspended or revoked.  Signing agents are particularly susceptible to making inadvertent clerical errors on notarial certificates because of the large number of documents contained in a loan package.  Signing agents should take special care to review all the loan documents carefully at the signing table before leaving the signer to make sure everything is completed correctly.



Michael Lewis is Managing Editor at the National Notary Association.

Refinance Affidavit and Deed Errors Prevalent

Deed and Refinance Affidavit (MD) Rejections Hit an All Time High!

With interest rates at their lowest point in years, and a boom in refinancing and purchase loans, common errors are being blamed for the sudden increase of rejected “Deeds” and “Refinance Affidavits (MD)” from County Recorder’s offices all over the country.
“Notaries are so busy these days, they often do not spend the time to check their work for completeness,” said N. Hamilton, servicing department – Irvine. “Often stamps are placed over text or forgotten altogether. “ Miss Hamilton also commented, “Notaries are not completing the wording within the Notary section, leaving the recorders office guessing who appeared before them.” Other problems noted have been as simple as the Notary stamp over inked, smudged or under inked, making the document unrecordable. 

These rejections delay the recording of the “Deed” or “Refinance Affidavit”, and put the financial institution at greater risk, as their loan is unsecured. Couriering the document to and from the notary adds additional expenses to the signing service and the Notary will usually have to go back out at their own expense to correct their mistake.
To avoid these errors, below are a few general guidelines from the County Recorder’s offices to insure the recording of all presented:
 
NOTICE TO NOTARIES PUBLIC
ON THE DESIGN AND USE OF AN OFFICIAL SEAL

(Section 8207 Government Code, Et. Seq.)
An official notary public seal must be clear on all documents so that the name of the notary, the State Seal, the words “Notary Public” and the name of the County where the bond is filed can be photographically reproduced.
The expiration of the commission and the notary and manufacturer identification numbers must also be clearly shown on the seals used by notaries public commissioned on and after January 1, 1992.
All the above referenced information must appear on the seal. It cannot be added in written or typed form or by the use of a separate stamp.
Either a rubber stamp or metal seal with the required information can be used. A seal must meet the “Notary Seal Requirements” for that State. The following format is recommended for a rectangular rubber stamp with black ink. (Please check your State requirements)

Documents may be unacceptable for recording if any one of the following conditions exists:
1. Seal is placed over or obscures an integral part of the text or a signature.
2. Seal is placed over decorative and colored symbols or borders of a document, resulting in the seal not being photographically reproducible.
3. Seal is altered with ink, typing, pencil, ECT.
4. Metal seal has been inked too heavily, resulting in an unclear impression that is not reproducible.
5. Placement of the commission expiration date outside the border of a seal (if commission expired on or after January 1, 1972)

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