Power of Attorney & How to Sign Legal Documents

By Marie Murdock

A power of attorney enables one person to sign legal documents or perform actions on behalf of another. Powers of attorney may be broad, granting almost unlimited authority, or they may be very limited and specific to a particular transaction. They may be created for convenience or in anticipation of a future debility.

Principal

The person who grants the authority by making the power of attorney is the principal. His is the only signature required on the power-of-attorney document in order for it to be effective. The principal must be an adult and of sound mind when the power of attorney is created.

Attorney-in-Fact

The person appointed to act on behalf of the principal is referred to as the attorney-in-fact, although he need not be an actual attorney. An attorney-in-fact is usually a friend or trusted family member who the principal feels has his best interests at heart.

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Signing Authority

When a power of attorney becomes effective, the attorney-in-fact may sign legal documents on behalf of the principal, subject to acceptance by the person or entity relying on its authority. A power of attorney may become effective immediately upon the attorney-in-fact receiving a signed copy, or it may state that it becomes effective only when the principal becomes mentally incompetent. A power of attorney that becomes effective immediately may also be durable, which means that it continues in effect even if the principal later becomes mentally incompetent. The authority granted under a power of attorney ceases upon its being revoked in writing by the principal and proper notice of the revocation being given, or upon the death of the principal. At that point, the attorney-in-fact may no longer sign legal documents on behalf of the principal.

Notary Acknowledgment

The form of a notary acknowledgment may vary depending on the type of document being signed. A brief acknowledgment verifying that a document was signed in the presence of the notary may be sufficient for some transactions, while powers of attorney to be recorded or used in real estate transactions may require a more detailed acknowledgment that complies with state-specific guidelines. An attorney or title company may refuse to rely on a power of attorney that doesn’t comply. The attorney-in-fact will generally be required to sign both his and the principal’s names to any conveyance document, even though the notary acknowledgment may state that his name only is subscribed as attorney-in-fact for the principal. The notary acknowledgment may further be required to state that the attorney-in-fact is signing with proper authority.

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How to Activate a Power of Attorney

References

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