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Powers of Attorney

Jun 10, 2021 | Written by: Lori K. MacWilliam, Esq. |

A power of attorney can be a useful document in many situations.  It can allow individuals the ability to select who will handle their affairs if they cannot do so, either temporarily or for a longer period of time.  However, many people do not understand the limitations of having a power of attorney.  Here are some key facts to consider:

  • A power of attorney will end upon the death of the principal.  Upon the death of the principal, some family members think that a power of attorney that permitted them to handle the principal’s affairs during life will allow them to continue to do so until an executor or administrator is appointed.  This is not the case.  The powers granted under the power of attorney terminate upon the death of the principal, although any documents signed by the agent prior to the principal’s death will remain effective.
  • It is preferable for the principal of a power of attorney to sign conveyancing documents for a real estate sale unless the principal is completely unable to do so. If an agent signs a deed or other conveyancing documents as an attorney-in-fact for the principal, the power of attorney document must be recorded with the deed so that anyone reviewing the title record in the future will be able to verify the attorney-in-fact’s authority. There are many reasons why a principal and the attorney-in-fact may not want this relationship disclosed on public record, and an improperly drafted power of attorney document may invalidate the real estate conveyance.
  • Institutional lenders may not permit an attorney-in-fact to sign mortgages and mortgage notes. Sometimes a family member may prefer to skip a real estate closing so as not to miss a day of work and will desire to appoint his/her spouse or other family member to sign the loan documents on his/her behalf. Many lenders do not permit this to occur because the use of a power of attorney to incur indebtedness may lead to defenses in a foreclosure.  Some lenders may allow it only if it specifically refers in the power of attorney document to the particular indebtedness.
  • A power of attorney should always state whether the power is durable or limited. A durable power of attorney remains effective if the principal is affected by a subsequent disability or incapacity. This establishes the attorney-in-fact’s authority without the relying party having to verify the current status of the capacity of the principal. A limited power of attorney limits the attorney-in-fact’s ability to act to a certain event or transaction, or expires upon the disability or incapacity of the principal.
  • If a power of attorney is used to sell real property or incur indebtedness, the proceeds check should be made payable to the principal, and not to the attorney-in-fact. The attorney-in-fact may sign for the principal but the benefit of the transaction belongs to the principal.


Lori K. MacWilliam, Esq. focuses her law practice on real estate, estate planning & administration, and general corporate matters. Please feel free to contact her at 908-735-5161 or via email.

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Any statements made herein are solely for informational purposes only and should not be relied upon or construed as legal advice.